'Blue Labour' creator has criticised Ed Miliband's leadership for having 'no strategy, no narrative and little energy'

Ed Miliband has come under ferocious pressure to show greater political courage after his close ally Lord Glasman said his leadership seemed to have "no strategy, no narrative and little energy".

Glasman – often described by the media as Miliband's intellectual guru and creator of the so-called Blue Labour movement within the party – has revealed his frustration at the way Miliband performed last year, claiming he concentrated too much on preventing party division and defending Labour's "toxic economic record" rather than offering a transformative new leadership.

Writing in the New Statesman, he complains: "Old faces from the Brown era still dominate the shadow cabinet and they seem stuck in defending Labour's record in all the wrong ways – we didn't spend too much money, we'll cut less fast and less far, but we can't tell you how."

In a caustic assessment, he says: "Labour is apparently pursuing a sectional agenda based on the idea that disaffected Liberal Democrats and public-sector employees will give Labour a majority next time round. But we have not won, and show no signs of winning, the economic argument. We have not articulated a constructive alternative capable of recognising our weaknesses in government and taking the argument to the coalition. We show no relish for reconfiguring the relationship between the state, the market and society. The world is on the turn, yet we do not seem equal to the challenge."

He asserts that it looks as "if Labour is stranded in a Keynesian orthodoxy with no language to talk straight to people".

Arguably, the attack is aimed as much at the economic strategy of Ed Balls, the shadow chancellor, as it is at Miliband.

Glasman says he still has faith in Miliband's leadership, but suggests that if he is to offer the possibility of a transformational Labour government, then "2012 must be a year of surprises, of engagement with the people and their concerns". He goes on: "Ed is going to have to show some leadership and courage if the political dynamics of this year are to be different."

Labour officials refused to comment on the article, which comes as Miliband's personal poll ratings remain low and tensions over political strategy on the economy, welfare and spending are surfacing.

On Twitter, however, the former deputy prime minister John Prescott said: "Glasman. You know sod all about politics, economic policy, Labour or solidarity. Bugger off and go 'organise' some communities!"

Although Glasman has no official role in the party leadership and is just one of the intellectuals Miliband consults, he was appointed a peer by Miliband for his free-thinking politics and, in the past, has been seen as influential. No recent meetings have occurred between the two men.

Blue Labour is an elusive complex of ideas, including community management, decentralisation and a rejection of liberal economics partly designed to win back working class support.

Miliband is due to come out on the front foot next week, but has been urged to move faster or risk seeing his "responsible capitalism agenda" being seized by coalition leaders who will inevitably command more media attention.

Glasman – who has made other controversial interventions that he has come to regret – insists Miliband has shown bold leadership in the past, for instance by advocating a living wage, an alternative to tax credits and welfare. He also suggests that advocacy of workers on remuneration committees "must be the start of a fundamental change in corporate governance".

In an attack on the current party link with the unions, he claims that New Labour's inheritance includes an "excessive reliance on managerialism in both the public and the private sectors, a disregard for the workforce, and an unhappy and abusive relationship with the unions". He says the party will not get out of its mess unless it changes these relationships.

In words that are likely to be gathered as ammunition by the chancellor, George Osborne, he writes: "The problem with Brownite political economy is that, even though it was true that a 3% deficit was not excessive in the context of economic growth, it was debt that was growing at the time, rather than the real economy. A vast, sustained expansion in private debt fuelled the financial sector throughout Brown's tenure as chancellor and then prime minister."

He goes on to attack some of the central insights of Brownite economics, and so by implication the thinking the shadow chancellor, writing "Endogenous growth, flexible labour-market reform, free movement of labour, the dominance of the City of London – it was all crap, and we need to say so."

He says: "Miliband needs to break out of internal party discussions and address the issue of national decline and how to reverse it. A balance of interests in corporate governance, a vocational economy, regional banks and fiscal discipline offer a platform for growth."

He sums up by saying that Miliband had kept the party together in 2011 and avoided a party split, but as a result "he has not broken through. He has flickered rather than shone, nudged not led".

"It is time for him to bring the gifts that only he can bring. He should leave behind stale orthodoxies and trust his instinct that change is essential. Now is the time for leadership and action. So far Ed has honoured his responsibilities but has not exerted his power."

Glasman later denied that his comments were meant as an attack on Miliband and attempted to play down his role behind the scenes.

"I have never been a senior adviser to the Labour leader. I am a backbench Labour peer and an academic."