Jeremy Corbyn will pledge to put state investment “centre stage” if he becomes Prime Minister, committing the Labour party to a break from what he called “the failed economic orthodoxy” of “the establishment”.

In a speech to the British Chambers of Commerce, the Labour leader said that only through cooperation between the state and markets, and an increase in public investment in science, technology and the green industries could government achieve “rising living standards for all”.

And in one of his most direct attacks yet on the record of Gordon Brown and Tony Blair, he will say that the “New Labour approach” of “light-touch” regulation of the banks before the financial crisis amounted to an attempt to “outsource economic policy to the City of London”.

“Osborne’s recovery is a house built on sand. But what Labour now stands for is far more than stopping the damage being done by this government... and its threat to our long-term economic future,” he is expected to say, criticising the Chancellor for seeking to “cut back government” in response to the financial crisis.

“But it wasn’t government that was the problem in 2007 and 2008 when the banking sector nearly drove the entire economy to the point of collapse,” he will say.

Jeremy Corbyn recalls Hiroshima 'horror' at Trident rally

“The New Labour approach was to opt for ‘light touch regulation’ of finance – and then sit back and collect the tax revenues. But you cannot base a decent social policy on an unsustainable economic policy. And we cannot outsource economic policy to the City of London. That has not served our economy well, and it has not served business well.”

He will call for a new “national investment bank” to target funding for enterprises that are in the wider public and economic interest “not just in the interests of quick returns”.