Alan Johnson’s shock resignation has left Ed Miliband facing his biggest test since being elected Labour leader.
It has forced Mr Miliband to reshuffle his shadow cabinet after less than four months.
He installed Ed Balls as shadow chancellor after overlooking him last October.
Challenged about his previous differences with Mr Miliband over aspects of Labour's economic policy, Mr Balls stressed that he would be “carrying on” the direction already set.
Speaking on a visit to Warwickshire College in Rugby, |he said: “Ed Miliband and Alan Johnson set out a very clear strategy in the last few months which I am carrying on to show that Labour has got an alternative, a responsible, tough but more sensitive way to deal |with it which is better for jobs and growth.”
He also had to defend himself from Tory and Lib Dem accusations that he co-authored Gordon Brown's economic policies.
“I think the reason why a |year ago unemployment was coming down was because |Gordon Brown and Alistair |Darling, in the face of a global financial recession, made the right calls,” he said.
“And now, to see deep, reckless cuts from a Conservative-Liberal coalition which put those jobs at risk, unemployment now rising, I think it's very important that we set out a very clear alternative and that's what I am going to do.”
Labour's deputy leader Harriet Harman insisted there would be no difficulties between Mr Balls and Mr Miliband.
“I think they'll have a very |dynamic and productive relationship, with Ed Balls being, I'm sure, an exceptional shadow chancellor under Ed Miliband's leadership,” she said.