Labour has vowed to wipe the slate clean of Michael Gove's "Kafkaesque" education system in which Whitehall oversees thousands of atomised schools, and is promising to introduce a new system of local school commissioners.

The plan, devised by Tristram Hunt, the shadow education secretary, and the former education secretary David Blunkett, is for commissioners to be responsible for raising standards, for handling failing schools and for deciding on proposals for new schools.

A report outlining the plan, written by Blunkett, accuses the coalition of producing a system where the logical conclusion would be 20,000 autonomous schools and "an unmanageable Kafkaesque caricature freeing schools from everything except the secretary of state".

Hunt also argued that the current "sink or swim system" in which free schools, academies and academy chains were managed by Whitehall, had left the school landscape mired in incoherence, confusion and lack of accountability.

The reform plan, which represents the most important statement on Labour education policy for 10 years, aims to assimilate New Labour education reforms, and the way in which those reforms have been developed and altered by Gove, the education secretary.

The plans are likely to be attacked by the Labour left as giving insufficient importance to the traditional role of local education authorities and by the right for lessening the autonomy of academies and free schools. Labour, however, claims the scheme brings a renewed focus on improvements to school standards through collaboration and co-operation between schools, rather than keeping a system of competition that failed schools unnoticed and left to rot.

Blunkett's proposal accepted by Hunt, is that a director of school standards, responsible for driving achievements, is established. It is expected there would be 40 to 80 directors located in cities and within groups of local authorities.

The independent directors, appointed by local authorities on a fixed-term five-year contract from a short-list approved by the education department, would be empowered to intervene locally in all state schools, including free schools, faith schools and academies. This would happen especially if the school inspectorate Ofsted found they were failing, mediocre, fragile or coasting.

Parents would also have the power to call for intervention by the local director. Labour said schools can be inspected and condemned by the Ofsted, but no process of remedial action exists. It says the models that improved standards via the London Challenge and Manchester Challenge educational programmes , could be improved across cities by setting up a structure for collaboration between schools.

Lord Adonis, one of the chief architects of Labour's reforms in the 1990s, said: "Astonishingly, there is still no mechanism for dealing with failing academies and free schools, apart from the personal intervention of Michael Gove or his successors as secretary of state. A proper failure regime needs to be put in place, including rapid replacement of sponsors and leadership where necessary. Labour will not duck this challenge."

The school standards directors would also be statutorily responsible for permitting new schools to open. Groups including faith, state, and free schools wishing to open an establishment would have to persuade the director, and compete on the basis of quality and cost effectiveness, rather than the ideological values of the secretary of state, Labour says.

Labour's reforms would also:

• Allow Ofsted to inspect academy chains, a power the chief inspector of schools, Sir Michael Wilshaw, has sought but not yet been granted by Gove.

• Review the structure of academy chains, giving academies freedom to move between chains.

• Give all schools freedom over the curriculum, the school day and buying in appropriate services.

• Require all schools to audit and publish accounts online, including contracts' costs over £10,000 and beneficiaries of the deals.

The report argues that "the architecture which leads schools to be contractually bound to the secretary of state and free floating from the communities they serve, is not only undemocratic and lacking in an any meaningful accountability, but is clearly unsustainable".

Sir Richard Leese, the Labour leader of Manchester city council, highlighted the extent to which education responsibilities were being devolved.

He said: "First and foremost we have to do what's right by our pupils and parents: ensuring that every child gets access to the best education in our schools.

"To deliver this, we need to move away from politicians in Whitehall running schools. Michael Gove has let school standards slip. It's right that Labour is giving local areas the powers to get tough on standards. David Blunkett's proposals signal a hugely welcome devolution of power in education."