Gordon Brown has called for the House of Lords to be replaced by an elected senate and far greater powers handed to the UK’s devolved parliaments in the wake of the Brexit vote.

The former prime minister said the decision to leave the EU meant the UK needed to have a fundamental rethink of its constitutional structures. It would bring the UK much closer to a federal system, and weaken the case for a fresh Scottish independence referendum, he said.

In a speech at the Edinburgh book festival, written in collaboration with Scottish Labour leaders and policy staff, Brown said Holyrood should be given powers currently controlled by the EU. Those could include control over all territorial fisheries, agriculture and social rights, as well as the European convention on human rights and EU academic programmes such as Erasmus. At the same time, a UK-wide constitutional convention was needed to investigate new structures, including a UK senate for the nations and English regions.

His speech deliberately echoes similar remarks by Kezia Dugdale, the Scottish Labour leader, over the weekend, when she told the Sunday Post there was an obvious case for Holyrood to have full control over international fisheries and agriculture after a Brexit, strengthening its devolved powers in both areas.

In extracts released before his speech, Brown said those reforms would require the carefully constructed deal by the Smith commission to give Holyrood extra tax and policy powers after the 2014 independence referendum would also need to be ripped up.

Brown couched these proposals as the most sophisticated alternative to two entirely competing stances: the unchanging support for the union of the Tories, and the quest for Scottish independence, which first minister Nicola Sturgeon is due to rekindle later this week. “We enter autumn with two entrenched positions which are polar opposites: the UK government wants Scotland in Britain but not in Europe and the Scottish government wants Scotland in Europe but not in Britain,” Brown’s statement said.

New circumstances require a constitutional breakthrough that transcends the sterile standoff between a non-change conservative unionism and an unreconstructed nationalism, both of which would cause Scottish unemployment to rise, he said. “Now is the time for fresh thinking and not a replay of the tired old arguments and slogans. [I] believe that we should examine a way forward that offers a more innovative constitutional settlement, more federal in its relationship with the UK than devolution or independence and more akin to home rule than separation.”

Brown said that overhaul would also include the Treasury sending up to £750m more to Holyrood: his advisers estimate the EU programmes, including agricultural subsidies, academic grants and regional funds, are worth £750m in Scotland. But Labour sources admit that giving Holyrood more money and far greater political autonomy from Westminster would provoke a fresh battle with English MPs over Scottish funding.

The Scottish government’s official fiscal data last week confirmed Scotland has a huge public spending deficit of £15bn, equivalent to 21% of all UK and Scottish public spending there and equal to 9% of Scottish GDP.

While Brown has been edging towards this pro-federal stance for months, having resisted it for much of his political career, his allies in Labour insist this more radical viewpoint is driven by the crisis forced on the UK by the unexpected vote in June to leave the EU. They acknowledge that the political gulf between Scotland, where the Scottish National party is now dominant and voters heavily supported an EU remain vote; and England, where the Tories are now dominant; has strengthened the case for greater autonomy for Holyrood.

Ian Murray, Scottish Labour’s only MP, said some form of federalism was now the most logical middle way. “It’s quite clear from a Scottish Labour perspective that independence is broken as a realistic prospect for Scotland, and the Tories just want to defend the status quo. That is also now broken.”

Similar measures were suggested in July by the cross-party constitution reform group and former Tory cabinet minister Robert Gascoyne-Cecil, who said the UK should be entirely remodelled on a federal system, with a UK senate at Westminster and a new English parliament.

Meanwhile, Charles Falconer, former Labour lord chancellor, has been drafting proposals for a quasi-federal structure backed by Scottish Labour to feed into UK Labour review on the UK’s future shape and structure after Brexit, under John Trickett.

Brown’s open backing for Holyrood to control fisheries out to the UK’s 200 nautical miles limit, have control over agriculture funding, and to repatriate human and social rights laws from Europe, also echoes the campaigning position of Scottish Brexit campaigners during the referendum.

Although Scottish Labour insists the SNP are fixed on using Brexit as the justification for a second independence vote, there are growing signals from Sturgeon that she now believes the Brexit vote has to be accepted and dealt with by her government in the near term. There are reports she could call a new referendum as early as next spring but the new pro-independence initiative being shown to her MSPs and MPs this Friday is expected to be cautious and longer-term.

Popular support for Scottish independence has risen slightly since the EU referendum but not substantially enough to risk a second referendum while potential yes voters want to see the results of the UK’s Brexit talks. Instead Sturgeon last week appointed one of the SNP’s toughest and most experienced operators, Michael Russell, as her minister for Brexit. She admitted Scotland’s difficult finances presented a major challenge.