Labour faces "a big task" to regain economic credibility and cannot make any commitments to reverse the coalitions cuts if it returns to power, Ed Balls will admit today.

In a high-profile speech setting out what he terms the "economic alternative" to the coalition government, the shadow chancellor will acknowledge that Labour should have been "clearer" before the 2010 general election that it would impose spending cuts and tax rises if re-elected.

Chancellor George Osborne's economic policy threatens Britain with "a decade of stagnation", Balls will warn in the speech to the Fabian Society in London.

Labour must offer an economic alternative which meets the twin challenges of boosting growth now through temporary tax cuts and investment in jobs and delivering reform over the longer term to build "responsible capitalism".

But he will caution: "To make that alternative work and be credible, it must be underpinned by a clear commitment to balanced but tough spending and budget discipline now and into the medium term...

"However difficult it is for me, for some of my colleagues and for our wider supporters, we cannot make any commitments now that the next Labour government will reverse tax rises or spending cuts. And we will not."

He will point to commitments already made by Labour to cut £1 billion from education, £5 billion from defence and 12% from policing budgets, and will say the party must be "even tougher on waste than our political opponents".

Balls's comments come after Ed Miliband declared that Labour must be prepared to make "tough decisions" in order to deliver fairness at a time when there is no money to spend, and amid Conservative taunts that the party has failed to spell out where it would make cuts.

The shadow chancellor will say that the coalition Government's economic "failure" means that Labour will inherit a "substantial deficit that we will have to deal with" if it wins power in 2015.

He will insist that Labour has always acknowledged the need for cuts to bring down the record state deficit, but will say that Osborne's decision to cut "too far, too fast" has meant lower growth, higher unemployment and more borrowing than would have happened under former chancellor Alistair Darling's plans.

Balls will challenge the Chancellor's claim that the eurozone crisis is to blame for stuttering UK growth, pointing the finger instead at "weak domestic demand" caused by increased unemployment and job insecurity.

November's Autumn Statement showed that Mr Osborne will have to borrow £158 billion more than planned and exposed the coalition's promises of a private sector-driven recovery as a "false prospectus" similar to that which caused the 1930s "lost decade", he will say.

But he will acknowledge that setting out an alternative to the coalition's economic policy is not enough, and that Labour must also overcome the electorate's doubts over its economic credentials.

Even when Labour was racking up a string of comfortable poll leads over the Conservatives last year, voters consistently rated David Cameron and Osborne as their preferred team to run the economy over Mr Miliband and Mr Balls.

"I have no illusions that there is a big task to turn round Labour's economic credibility and show that - even as unemployment rises, growth stagnates and long-term reform stalls - Labour can be trusted again," Mr Balls will say.

"It is not enough simply to be right in our diagnosis of the coalition's failures and unfairness...

"The challenge we face is both to set out a radical and credible alternative and to win public trust for that alternative vision."