Vince Cable will launch an aggressive attack on capitalism with a speech that warns that the current system "takes no prisoners and kills competition where it can".

In an echo of Denis Healey's famous 1974 pledge to "squeeze property speculators until the pips squeak", Cable will unveil plans to shine a "harsh light into the murky world of corporate behaviour".

The business secretary will announce the launch of a major consultation on takeovers and executive pay, with the intent of ending "corporate short-termism".

"Let me be quite clear," Cable will tell the Liberal Democrat conference in Liverpool. "The government's agenda is not one of laissez-faire. Markets are often irrational or rigged."

The business secretary plans to identity the sort of malpractices that are causing harm to the wider economy. "Why should good companies be destroyed by short-term investors looking for a speculative killing, while their accomplices in the City make fat fees? Why do directors forget their wider duties when a fat cheque is waved before them? Capitalism takes no prisoners and kills competition where it can," he will say.

Early leaks of Cable's outspoken remarks were condemned as "emotional" by the Confederation of British Industry. Richard Lambert, director general of the CBI, said: "It's odd that he thinks it sensible to use such emotional languague … Mr Cable has harsh things to say about the capitalist system: it will be interesting to hear his ideas for an alternative."

Aides defended Cable's speech. It is designed, they say, to ensure Britain has a properly regulated free market. "Of course we are in favour of the free market but it needs proper rules," one senior Lib Dem said. "Capitalism left to its own devices just creates monopolies which work against the interests of consumers and inflict severe damage on the wider economy."

Cable hopes his consultation on takeovers and executive pay will boost the power of ordinary shareholders, whose interests have often been swept aside by boardrooms in recent years. Aides cite the collapse of Enron and the Kraft-Cadbury takeover as examples of companies failing to take into account the interests of their wider shareholders.

The consultation will examine:

• How shareholders can have a greater chance to influence a company's strategy.

• Whether clarification is needed of the Companies Act 2006, which includes an "enlightened shareholders' duty" clause. This could mean that directors would have to provide far greater information about takeovers.

• Ways in which pay incentives for directors are drawn up. "There are golden parachutes and golden coffins which shareholders may need to know about," one source said.

Cable's aggressive speech follows his strong warning to the banks yesterday that they could face more taxes if they pay out "outrageously large" bonuses. Echoing a warning earlier in the day by Nick Clegg, who said the government would not "stand idly by" if "offensive" bonuses were paid, Cable told the BBC: "If banks are saying to us they have got lots of money to spread out on bonuses and indeed dividend payments at a time when they are constricting credit to small and medium enterprises, then the government may have to use some form of taxation to change their behaviour."

The City's top regulator insisted that he was not at odds with the Lib Dems. Lord Turner, the chairman of the Financial Services Authority, said: "We need to … recognise, that in finance and economics, ill-designed policy is a more powerful force for harm than individual greed or error."