Former energy secretary admits Labour must change if it wants to win over disaffected Lib Dem voters

The Labour leadership candidate Ed Miliband has predicted that the Liberal Democrats will "decline and fray" under the pressures of coalition but warned that Labour must change if it wants to win over disaffected Lib Dem voters.

Speaking on the Guardian's Politics Weekly podcast, the former energy secretary reached out to Lib Dems by going beyond his previous line that the Iraq war had precipitated "a catastrophic loss of trust" in the government, describing the 2003 invasion an "error" in itself.

He also suggested Labour should adopt a "small l liberal position" on civil liberties, admitting that this would involve being "in a different place from the past ten years".

While Miliband believes the current defence review should include Trident, he will have disappointed many Lib Dems by insisting the review should not be allowed to reconsider whether the UK needs a nuclear deterrent at all.

He also failed to meet the demands of political reformers for a concerted Labour campaign for a yes vote in next year's referendum. Although he confirmed he would be supporting the proposal himself, he made it clear that, if he becomes leader, other shadow cabinet members would be allowed to take a different position.

Looking back to the 1975 referendum on Europe in which Harold Wilson allowed his cabinet to campaign with their consciences, Miliband said: "1975 is the best lesson for us, and people will take their own position on this."

Liberal Democrats expressed disappointment about this position, fearing a split Labour party could help the first past the post voting system to survive.

Richard Grayson, the left-leaning vice-chair of the Liberal Democrat federal policy committee said: "It is, of course, welcome to see Labour politicians accepting the Lib Dems got it right on Iraq, but they won't win many Liberal Democrats over while they remain half-committed on political reform".