A Conservative administration would scrap Gordon Brown's fiscal rules and establish an independent Office for Budget Responsibility, David Cameron said today.
It would stop governments running up excessive debts while giving the Bank of England new powers to rein in reckless lending by banks, he said.
The rules, which require the Government to balance the books over the economic cycle and keep state borrowing below 40% of national income, have formed the cornerstone of Mr Brown's economic policy both as Chancellor and Prime Minister.
But Mr Cameron said they were now "discredited" by the increasing levels of national debt and Government borrowing.
He set out Tory plans for a new fiscal framework which he said would help Britain through its current financial crisis and prepare it to deal with future shocks to the global economy.
Addressing the Tories' annual conference in Birmingham today, Mr Cameron borrowed Mr Brown's often-repeated "no more boom and bust" slogan to send a message to the Prime Minister: "You have had your boom and your reputation is now bust."
He added: "We need to call time on this dreadful situation of private indebtedness and state indebtedness. That is what this plan sets out.
"This is the end for the big-spending, big-taxing, recklessly borrowing, big, bossy, interfering government that promises so much and delivers so little.
"People in this country are crying out for change. We have a plan for change, so let's show them that we can be that change."
Mr Cameron launched a "Reconstruction Plan" setting out a new mandate requiring governments to reduce debt as a percentage of national income and balance the current budget over the economic cycle.
The new OBR would produce fiscal forecasts ahead of each budget, including a judgment on the sustainability of the public finances and the scale of adjustment to tax and spending plans required to ensure that the government meets its mandate.
While the Chancellor would not be bound by its judgments, he would have to explain to Parliament why he disagrees, which Mr Cameron said would create a "massive rod for our own backs" and make it impossible for him simply to ignore its recommendations.
In an overhaul of the tripartite structure set up by Mr Brown - under which the Treasury, Bank of England and Financial Services Authority each have a role in overseeing the financial sector - Tories would give the Bank a greater role in market oversight.
A new Debt Responsibility Mechanism would require the Bank to make regular assessments of the market-wide risk caused by debt, which would be used by the FSA when regulating lending by individual financial institutions.
There would also be deposit insurance of up to £50,000 for savers, payable within seven days, as well as a national financial advice service and a requirement on the FSA to tackle "irresponsible" bonus structures in City institutions.
Mr Cameron warned against "bashing" bankers and told BBC1's Andrew Marr Show he would not seek "cheap headlines" by blaming greedy City practices for the current crisis.
Speaking as it emerged that Bradford & Bingley was set to be taken into public ownership, he also warned that the Tories would not sign "blank cheques" for the taxpayer to bail out failing institutions. The Bank of England should be empowered to help struggling banks through without leaving the Treasury liable for billions of pounds in debt, he said.
Mr Cameron acknowledged that he could not rule out tax rises if a Conservative government comes to power, but insisted that his policy of "sharing the proceeds of growth" meant that he should be able to reduce taxes over the longer term.
Shadow chancellor George Osborne said the Tory package amounted to "the most fundamental overhaul of fiscal policy in living memory" which would "give the UK the most credible and responsible fiscal policy framework in the world".
In his keynote speech to the conference tomorrow, he will say: "It is time to bring an end to Gordon Brown's Age of Irresponsibility."
The Conservative plan would "bring financial responsibility to our economy and fiscal responsibility to our Government... transform the way budgets are made, stop chancellors fiddling the figures, and protect the public from reckless debt", he will say.
Chief Secretary to the Treasury Yvette Cooper said that the Tory plans show Mr Cameron's team "frankly do not understand the nature of what's at stake here and the nature of the way in which the financial system is operating under the pressures of the credit crunch".
Ms Cooper told BBC1's The Politics Show the Government had already provided the Bank of England with the powers which the Tories are now demanding.
"That is exactly what we did. We did that in February and in March and the Conservatives voted against it," she said. "David Cameron and George Osborne voted against the very powers they are calling for now. That's incoherent and irresponsible of them, and I just think it means they simply do not understand how the system's working."
Liberal Democrat Treasury spokesman Vince Cable said: "For several years the Liberal Democrats have advocated the introduction of a genuinely independent system for monitoring the management of the budget, to stop the Government marking its own exam papers. The Tories seem to have found a rather complicated way of doing the same thing.
"It should not require the creation of a new bureaucracy, as the Tories want. The job could easily be done by the National Audit Office, whose independence is recognised by all."Reuse content