However, Labour is still struggling to convince voters it can be trusted on the economy, lagging behind the Conservatives on the issue, according to a survey by Ipsos MORI.
The verdict from voters follows a torrid few weeks for the Tory-LibDem Coalition.
Mr Cameron's administration has appeared to struggle since the Budget saw ministers accused of wanting to tax everything from grannies to pasties.
Confirmation of a so-called double-dip recession has only added to these woes, along with difficult local elections in which both Coalition parties lost hundreds of councillors.
In the midst of the "omnishambles", Mr Cameron's personal rating has fallen to the lowest level since he was elected Conservative leader in 2005.
The number of those "dissatisfied" with the Prime Minister has now risen to 60%, according to the poll.
Nick Clegg has also seen his satisfaction ratings fall to their lowest level, with 64% of voters dissatisfied with the Deputy Prime Minister and Liberal Democrat leader.
The poll shows Labour has opened up a 10-point lead over the Conservatives among those certain to vote, the biggest margin since last February.
But on voters' top priority – the country's finances – the party is still behind the Tories. Of those asked, 31% favour the Conservatives, with just 30% backing Labour to run the economy.
Gideon Skinner, head of political research at Ipsos MORI, said: "Labour's lead is the highest for over a year, and they have closed the gap on economic competence – but even after the worst- received Budget for over 15 years, they still have work to do to become the most trusted on this key issue."
The poll was released as Labour leader Ed Miliband demoted one of the leading Blairites in his frontbench team. Liam Byrne's job leading the party's policy review has been given to left-winger Jon Cruddas.
Mr Byrne had been widely predicted to lose his post in the mini-reshuffle, triggered by Peter Hain's announcement he was standing down as shadow Welsh Secretary.
He had previously thrown his hat into the ring to become mayor of Birmingham, until voters rejected creating the post in a referendum earlier this month.
But Mr Byrne still hangs on to his other job of shadow Work and Pensions Secretary.
Mr Miliband's aides last night insisted he had not been stripped of the policy review post but the party leadership had considered it too important to be split with another job.
Among other moves announced yesterday, Andrew Adonis, a former transport secretary, is to advise the policy review on industrial strategy, just weeks after he said the party was getting it wrong on opposing a third runway at Heathrow.
Owen Smith, who was elected to Westminster in 2010, has been selected to replace Mr Hain.
In turn, Catherine McKinnell will take his place in the shadow Treasury team and Lisa Nandy, also a member of the 2010 intake, is promoted to the role of education spokeswoman. Mr Byrne said: "I am delighted to hand the policy review on to my friend Jon Cruddas.
"This is the biggest policy review we've ever undertaken, it's seen us already get back in touch with over a million people, and lay down the ideas and arguments which are setting the terms for political debate in Britain."
Ipsos MORI interviewed 1006 adults across the UK.