Washington ? Sen. John McCain, casting himself as the embodiment of the Republican Party’s future in the vein of Ronald Reagan, said Thursday the GOP has lost its way and must return to “common-sense conservatism.”

“Though we suffered a tough defeat last week, we will recover if we learn our lesson well and once again offer Americans enlightened, effective and principled leadership,” the Arizona Republican said in a speech that laid out his vision for the party’s path forward – and could set the tone for a potential presidential campaign.

The same day he launched a committee to explore whether to run in 2008, McCain invoked the legacy of Reagan, who won the presidency four years after leading the rebirth of a dispirited GOP following the Republican defeat in the 1976 presidential election.

“We can do it again if we lead and inspire as he did,” the four-term senator told party loyalists. His remarks came a week after a sobering election in which Republicans lost control of Congress and suffered losses at all levels of government.

A maverick who has sought to mend a rocky relationship with the GOP base, McCain delivered his take on the current and future state of the party in a hotel conference room before more than 100 members of GOPAC, a conservative organization that helps elect Republicans. Earlier, McCain touched on some of the same themes before another conservative cornerstone – the Federalist Society. He received standing ovations and hearty applause.

Fifteen months before the first 2008 presidential nominating contests, McCain is positioning himself as the GOP standard-bearer while President Bush takes on lame-duck status and dispirited Republicans search for a road to recovery.

Although the president was not mentioned, McCain’s speech amounted to a criticism of the party under the leadership of Bush, whose popularity is at a low point amid chaos in Iraq and increasing federal spending at home.

“We lost our principles and our majority. And there is no way to recover our majority without recovering our principles first,” McCain told both audiences as he reflected on the 2006 election.

McCain says he will wait until after the Christmas holiday to decide whether to make a second bid for the White House. He lost to Bush in a contentious race in 2000.

Former New York City Mayor Rudy Giuliani has filed paperwork to test the waters.

McCain’s other would-be rivals include Massachusetts Gov. Mitt Romney, Arkansas Gov. Mike Huckabee, Senate Majority Leader Bill Frist of Tennessee and New York Gov. George Pataki.