Ed Miliband today promised to make Labour the party of people's "hopes and aspirations" as he launched a full-scale review of its policies.
Addressing the party's National Policy Forum in Gillingham, he said that they had to recognise the need for change in the wake of their general election defeat and to move "beyond New Labour".
"We have to show again we are the people who are the idealists, we are the people who are the optimists, we are the people who can represent the hopes, the dreams, the aspirations of the British people," he said.
"So please join us on this journey. Join us on this journey which makes us once again the people's party, the party of people's hopes and aspirations, back on people's side, back in power making for the fairer, the more equal, the more just country we believe in."
Mr Miliband said that while there was deep anger at the "broken promises" of the Conservatives and Liberal Democrats, Labour could not afford simply to wait for the coalition to "screw up".
"I know that we have got to change in order to win," he said.
"There is no short cut or quick fix to this. We shouldn't mistake the anger we feel at what the coalition is doing to the country for a sense that it isn't as much about us as it is about them.
"The strategy that says wait for them to screw it up, simply be a strong opposition, is not a strategy that is going to work for us. We need to do that hard thinking of our own."
Mr Miliband said that he made no apology for speaking up for what he describes as the "squeezed middle".
"People were feeling squeezed before this Government. They are feeling much, much more squeezed now this Government is in power," he said.
"So it is about standing up for the hopes and aspirations of people. That must be our mission, to narrow the gap between the dreams that people can see around them and their chances of realising them."
He also indicated that he was ready to reform the system which elected him party leader, saying that a system where some members had multiple votes should be a "thing of the past".
Mr Miliband said that the Labour Party needed to become again a "campaigning force" throughout the country.
"We have to be a party rooted in people's lives," he said. "We need to become a movement again. We have to reach out to people."
He announced the formation of a series of working groups, chaired by shadow cabinet ministers, intended to lay the ground for a new policy programme to take Labour into the next general election.
He is also appealing to universities, think-tanks, charities and other independent institutions to come forward with ideas that the party can incorporate into its reform agenda.
The process is intended to provide the building blocks for Labour's general election platform - feeding into a report to next year's annual party conference, with a second follow-up report to the 2012 conference.
Together they will form the basis of detailed policy-making leading up to the final general election manifesto.
The new groups will include two looking at the economy, chaired by shadow chancellor Alan Johnson and shadow business secretary John Denham.
Shadow health secretary John Healey, shadow education secretary Andy Burnham, shadow home secretary Ed Balls and shadow justice secretary Sadiq Khan will chair a series of groups looking at public services.
Groups looking at the role of families and carers will be chaired by shadow work and pensions secretary Douglas Alexander, shadow communities secretary Caroline Flint and shadow Olympics minister Tessa Jowell.
The shadow leaders of the Commons and the Lords - Hilary Benn and Baroness Royall of Blaisdon - will lead groups on political reform, while shadow foreign secretary Yvette Cooper and shadow defence secretary Jim Murphy will look at security issues.
Further groups will consider a range of broader issues, including volunteering, isolation and loneliness in modern Britain, living on low pay, and what it is like to be a victim of crime.
Mr Miliband is also setting up separate taskforces on small business and entrepreneurs, fair pay and the impact of high levels of personal debt.
A party spokesman said: "We want this process to be rooted in real people's lives. We want it to lead to real change in our movement.
"Ed is determined that Labour mustn't retreat into a discussion with itself. He wants Labour to reach out in a way it was never able to do while in government, and draw on the best ideas from across the political landscape."