Labour must make delivering "power to the people" a major mission for a third successive term in office, the party's general election co-ordinator Alan Milburn urged last night.

Mr Milburn, the Chancellor of the Duchy of Lancaster, outlined his ideas for how to devolve power to local communities in a speech to the Social Market Foundation in London.

The Darlington MP told his audience that having established a reputation for economic competence, Labour must now tackle the fundamental issue of how to give citizens a greater say in how their communities are governed.

He said: "As we look ahead to the next General Election - and the prospect of a historic third consecutive Labour term in office - we can commit ourselves to delivering what Labour has long advocated but never achieved: giving power to the people."

Mr Milburn has been widely reported as being locked in a tussle with Chancellor Gordon Brown over whether Labour's election strategy should focus on highlighting the Treasury's economic record, or concentrating on the need for further radical reform of the welfare state and public services.

Mr Milburn said: "This is the time to keep our foot on the accelerator of reform, not the brake; not to rest on our laurels, but to renew the New Labour project."