Labour leader Ed Miliband should stop trying to court the Blairite wing of the party, mayoral candidate Ken Livingstone said today.
But he claimed Mr Miliband could be the next Prime Minister and "transform Britain in a way that we haven't seen for a very long time".
Speaking on the BBC Radio 4 Today programme, Mr Livingstone, who lost to Tory candidate Boris Johnson last week in the race to become London Mayor, said working-class people had become "disillusioned" at the last Labour government's failure to create "good jobs".
He said that, for the last 30 years, Britain had taken a "wrong turning", adding Mr Miliband was now "getting the economic strategy right".
Mr Livingstone said the current Government had "got away" with claims that the last Labour administration had saddled the country with debt.
He said: "For 30 years, Britain has taken a wrong turning. Inequality of wealth has doubled. We were told if we deregulated, if we liberated the banks, the whole economy would rise and there would be a trickle-down effect.
"Sadly, Tony Blair bought into that, New Labour bought into that. I think we are at a turning point in politics now. We have to make something that somebody wants to buy, we won't just be able to rip off a bit of commission on all the financial transactions.
"I think a lot of the disillusion amongst working-class people, whatever their colour, is that the last Labour government didn't create good jobs for working-class people."
Mr Livingstone added: "If I have one criticism of Ed Miliband - and as well as being a friend, I think he is genuinely a Labour leader who will transform Britain in a way that we haven't seen for a very long time - (it) is that I think he is far too concerned about carrying the discredited old Blairite wing with him."
And Mr Livingstone dismissed any suggestion that he planned to join the House of Lords.
Asked whether he would accept a peerage, he said: "Oh God, no, spare me that. I've been punished enough."