Setting out a bleak vision of the economic challenges faced by the country, the Deputy Prime Minister told activists that "nothing worthwhile can be won without a battle".
But proving the party could manage the economy better than Labour and more fairly than the Tories would reap electoral reward.
The rallying cry came in Mr Clegg's keynote speech at the end of a turbulent conference in Brighton.
The leadership secured backing from members for the coalition's austerity programme - but faced a wider public backlash over proposals to extract more tax from the rich and strip wealthy pensioners of benefits.
In an announcement designed to soothe unrest among the rank and file, Mr Clegg announced that popular former leader Paddy Ashdown is being brought back to run the general election campaign.
He pledged to block any Tory bid to further reduce the top rate of income tax, following controversy over his acceptance of a cut from 50p to 45p.
Mr Clegg reiterated his determination to ensure the rich shoulder the burden of an additional £16 billion of public spending cuts expected in 2015/16 and to fight "short-sighted" Tory opposition to green policies.
But he also delivered difficult messages on the need to make further cuts to the welfare budget to prevent Britain descending into a deep economic trough that would leave a "trail of victims".
"At the next election, all parties will have to acknowledge the need for further belt-tightening. That much is inescapable," he told the conference.
"But the key question we will all have to answer is who will have to tighten their belts the most?
"Our position is clear. If we have to ask people to take less out or pay more in, we'll start with the richest and work our way down, not the other way around.
"We won't waver in our determination to deal with our debts. But we will do it in our own way, according to our own plans, based on our own values."
He singled out shadow chancellor Ed Balls for particular criticism as he launched a staunch defence of the coalition's economic "Plan A", insisting it was "tough enough yet flexible" and would allow more "bold steps".
There remained a danger that the UK could end in Greek-style turmoil and a rise of extremism if there was a loss of confidence in the Government's determination, he said.
"If we fail to deal with our debts and tackle the weaknesses in our economy, our country will pay a heavy political price," he said. "But the human cost would be higher still. Not only would we fall behind internationally, we would leave a trail of victims at home too.
"So to those who ask, incredulously, what we - the Liberal Democrats - are doing cutting public spending, I simply say this: Who suffers most when governments go bust? When they can no longer pay salaries, benefits and pensions?
"Not the bankers and the hedge fund managers, that's for sure. No, it would be the poor, the old, the infirm; those with the least to fall back on."
He dismissed David Cameron's attempts to paint his party as environmentally friendly as a "PR exercise" but said the Lib Dems were there to "hold them to their promises" to promote green growth.
Hailing a series of successes in securing Lib Dem-inspired policies, he announced that the latest was a £50 million-a-year "catch-up premium" for extra tuition for pupils failing to make the grade in English and maths.
And in a rousing conclusion to a speech billed as his attempt to define the Lib Dems as the "third party of government", not simply a vehicle for disaffected protest voters, he invoked the party's mantra of "marching towards the sound of gunfire".
"They never flinched, and nor should we. We owe it to them to seize the opportunity they gave us, but which they never had. Taking on the vested interests. Refusing to be bullied. Refusing to give up. Always overturning the odds.
"Fighting for what we believe in, because we know that nothing worthwhile can be won without a battle. A fair, free and open society. That's the prize. It's within our grasp. So let's go for it."