Labour must be bold and radical in order to inspire a generation of working people to "rebuild Britain", the head of the party's policy review says.

In his first interview since taking up the post in May, Jon Cruddas says Ed Miliband cannot afford to take the safe route if Labour is to address the urgent challenges of a country in economic and social crisis. Cruddas, a former deputy leadership candidate, says he would not want to continue in the job if Labour were to return to the policies and language of its final years in power under Tony Blair and Gordon Brown.

"I am not here to play the game. I am not here just to dust down the record. If it is on those terms I'm not interested," he says. Instead he says Labour must show its radical edge. His comments will cheer many in the Labour movement who are urging Miliband to move faster to develop a more distinct policy agenda that can inspire grassroots supporters and propel the party back to power after just one term in opposition.

But his words may alarm the Blairite rump in the shadow cabinet that thinks Labour must court middle England if it is to win a majority in 2015.

Cruddas says he has been impressed by Miliband's determination to question orthodox political thinking. "I think he knows where I am coming from," he says. Caution, he says, is not an option for Labour. "There is no safe route through this, really. We have to be bold. We have to develop a sense of vitality and energy. What we have to have is bold, radical solutions."

He says the party needs to embrace reform within the context of rebuilding the country as it struggles with recession and the eurozone crisis. "In 1945, Labour locked in the organised working classes into an overarching story of national renewal and that is the equivalent task at hand today, to do that."

Cruddas says he has already won agreement of the shadow cabinet to replace the entire machinery of the policy review set up after the election, which involved 29 groups, with just three – tackling modernisation of the economy, society and politics.

Speaking at the party policy forum in Birmingham on Saturday, Miliband said his "vision for our future economy" would be one in which companies would be seen as a project between workers, management, shareholders and customers, with reduced pay inequality and an end to poverty wages.

He said the UK's economic woes had shown David Cameron and his party to be tied to a set of outdated, ineffective economic, social and political orthodoxies which were "crumbling before our eyes". Citing details from Cameron's appearance before the Leveson inquiry on Thursday, including an email exchange with former News International chief executive Rebekah Brooks, he said: "This is a prime minister who sent the texts, received the texts, even rode the horse."

He added: "What we now know is we have a tainted prime minister. Tainted because he stands up for the wrong people. Tainted because he does not stand up to the rich and powerful. Tainted because he cannot be the change this country needs.

"When this prime minister says 'We're all in it together', he means country suppers with Rebekah Brooks. When we say we are all in this together, we are talking about the hard-working people of this country."