Shadow chancellor Alistair Darling will launch a thinly-veiled attack on Gordon Brown today, saying Labour was defeated at the general election because it ignored the deficit.
Mr Darling will say his colleagues failed to recognise public concern over spiralling government debt, instead getting "sidetracked" into an argument for "investment over cuts".
The MP, who has announced he is stepping down from frontbench politics next month, is expected to warn that while Labour should criticise how the coalition is curbing spending, it must "accept the need to cut the deficit".
The intervention, in a speech at the Edinburgh Book Festival this evening, bears striking similarities to Chancellor George Osborne's attack on Labour's "deficit deniers".
Mr Darling is due to mount a staunch defence of his handling of the credit crunch, insisting: "For the avoidance of doubt, I believe we handled the financial crisis of the past few years with competence, integrity and above all an absolute determination on my part not to put short-term political advantage before the interests of the country and, specifically, of risking a second period of recession."
But in a pointed reference to Mr Brown's mantra of "investment over cuts", he will use the same phrase to illustrate how he believes the party lost the support of the electorate.
"Labour lost because we failed to persuade the country that we had a plan for the future. What is important now for our party is we take stock and be honest about what went wrong," he is to say.
"We rather lost our way. Rather than recognising that the public were rightly concerned about the level of borrowing, we got sidetracked into a debate about investment over cuts.
"By failing to talk openly about the deficit, and our tough plans to halve it within four years, we vacated the crucial space to make the case for the positive role government can play.
"You will only convince people you've got the answers if they believe you know what the question is in the first place. You can't have political credibility without economic credibility."
He is expected to add: "Warn, as I have tonight against the Tory gamble with people's jobs and livelihoods, but accept the need to cut the deficit.
"Yes, criticise the Government for doing it too quickly and with too much enthusiasm. But let's not pretend that somehow that we can just ignore it. If we do, we will lose the crucial argument that you can reduce borrowing fairly, while supporting jobs and investing in the key areas of the future."
It is the latest swipe by Mr Darling at his former boss, who is believed to have tried to sack him last year over his reluctance to deliver a "giveaway" Budget.
The ex-chancellor later revealed in a frank interview that Downing Street had unleashed the "forces of hell" against him when he spoke out about the poor state of the UK economy.
Mr Darling has also disclosed that he wanted to commit Labour to a VAT rise at the election as part of plans to tackle the deficit - but was vetoed by Mr Brown.Reuse content