* Govt commits to halve budget deficit over four years
* Labour to set out plans for final months before election
* Conservatives says programme lacks substance
By Matt Falloon and Keith Weir
LONDON, Nov 18 (Reuters) - Britain's Labour government will make a legal commitment to halve its burgeoning budget deficit in four years in a final set of draft laws ahead of an election next year, business minister Peter Mandelson said on Wednesday.
Centre-left Labour, in power since 1997, is seeking to revive its fortunes ahead of an election due by next June that the opposition Conservatives are forecast to win.
Measures to clamp down on bankers' pay, improve failing schools and boost care for the elderly and infirm are also expected to be announced when Queen Elizabeth formally opens a new session of parliament around 1130 GMT.
"What you will see is a very strong and rich policy agenda to strengthen economic growth and secure our economy ... as well as locking in our commitment to halve the financial deficit," Mandelson told BBC radio.
Britain's budget deficit is set to hit more than 12 percent of gross domestic product this year, raising concerns on markets about the future management of the public finances.
Mandelson said more details of how to cut the deficit would come in the pre-budget report, due on Dec. 9.
Reducing the deficit will be a central theme in the election campaign. Prime Minister Gordon Brown's Labour says the Conservatives would cut spending too rapidly and jeopardise recovery from the longest recession since World War Two.
"POLITICAL EXERCISE"
The recession, a scandal over the misuse of public money to fund politicians' expenses and disquiet over the Afghanistan war have made defeat for Labour seem all but inevitable next year.
An ICM poll for the Guardian newspaper this week showed Labour's support had increased by 2 points to 29 percent, but that was still some 13 points behind the Conservatives.
Mandelson said the legislative programme was about "governing not electioneering" but it will be hard to pass all of the bills in the short time remaining before the election.
Party officials are hopeful their programme will reassure voters that Labour still has the energy and ideas to govern after 12 years in power. They also hope it will expose holes in David Cameron's Conservatives policy intentions.
Cameron called the programme a "political exercise" designed to try to woo voters.
"They are not passing laws for the good of the country, they are passing laws to try and save the Labour Party," he said.
"This isn't today the end of this government, but let us hope it is the beginning of the end."
(Additional reporting by Peter Griffiths)