Mandelson warns on Labour's future

Labour risks getting stuck in an "electoral cul-de-sac" if it takes a "pre-New Labour" direction under its new leader, Lord Mandelson has warned.

His comments were seen as a warning against the election of Ed Miliband, who has positioned himself to the left of his brother David as the pair have emerged as front-runners in the race to succeed Gordon Brown.

The former business secretary - and architect of New Labour - warned that the party risks a long period in opposition if it swings to the left and fails to recreate the wide-ranging coalition which took Tony Blair to power in 1997.

Lord Mandelson's intervention could give a decisive boost to David Miliband's campaign at the start of the week when MPs, MEPs, party activists and members of affiliated organisations will start voting in the postal ballot to elect a new leader on September 25.

The shadow foreign secretary is seeking to build momentum as the contest enters its most crucial stage with a call to turn the Labour Party into a "living, breathing movement for change" when he addresses supporters at a Westminster rally.

David Miliband will dismiss Prime Minister David Cameron's "Big Society", insisting what is needed is the "good society" typified by the community organisers he has been fostering with cash raised for his campaign.

Meanwhile, shadow energy secretary Ed has called for Labour to end its caution over tax, telling The Independent the balance between public spending cuts and tax increases for the rich should be shifted in favour of public services.

Ed Miliband said New Labour had become "ideologically beached" because it was haunted by "old ghosts" from the past, when the party was viewed as tax-raising and anti-American. Its desire to hide the views of some of its members from the voters had led to a damaging "control freak" mentality.

Responding to Lord Mandelson's comments, Ed Miliband's campaign agent, MP Sadiq Khan, said: "This leadership election, in its final few days is coming down to a stark choice between the New Labour past or Ed Miliband's plan to change the party and reach out to those we lost since 1997. The clarity of this choice is good for Ed's campaign and good for Labour.

"We should always listen with interest to what figures from Labour's past 13 years are saying. With all respect to Peter though, he should know better than anyone - because he was in charge of Labour's last election campaign - that without real change, voters won't come back to Labour."