Labour needs "restless rethinking" of its purpose and its policies if it is to return to power, former leadership candidate David Miliband said on Wednesday.

In his most high-profile foray into the political frontline since being defeated by his brother Ed in the 2010 poll, the former foreign secretary set out a seven-point plan for the party.

He said that Labour must admit "loud and clear" where it got things wrong in power, but - in what may be seen as a defence of New Labour against his brother's criticisms - he insisted that the party must assert that the gains made between 1997 and 2010 "far outstripped the mistakes".

Mr Miliband was careful to praise his younger brother's leadership, but his decision to set out his own thoughts on Labour's future direction will inevitably spark speculation that he has not ruled out a return to the party's top ranks.

His intervention, in an essay in the New Statesman, came as Labour's former Chancellor Alistair Darling told the same magazine that the party needs to present its policies "in a sharper way".

Mr Darling said: "In politics if you make an assertion that something needs to change I think you have to have an example of how you do it. In relation to growth, I think that's absolutely critical.

"Do we have to do more to present this in a sharper way? Of course we do."

Mr Darling said he would like to see David Miliband in the shadow cabinet, though he accepted that he was right to fear comparisons with his younger brother.

"I would like him back on the front bench. For his knowledge, and his judgment," said the former chancellor.

"When I've seen him on various programmes talking about foreign affairs, he talks with authority. I understand his reluctance. There's always comparisons. He is probably right to take a rain-check. Certainly, he would be a gain."

David Miliband told the New Statesman that "Ed should be given credit for preventing disunity in the Labour ranks since its disastrous 2010 general election defeat". And he said his brother had "shown he understands the need for a policy rethink and had spoken powerfully and correctly about welfare."

But he warned that there were elements within Labour who wanted to respond to defeat by retreating to "big state" social democracy.

And he said the party had "a lot to be concerned about" in terms of its prospects of electoral victory in 2015, when Conservatives will be boosted by their financial advantages and boundary changes which will favour them.

David Miliband wrote: "We will win again only when two conditions are met.

"First, that we fully understand in a deep way why the electorate voted against us in 2010. Second, that we clarify the kind of future we seek for Britain, and the means to achieve it, in a way that speaks to the demands of the time."

Labour must show they are "reformers of the state and not just its defenders", he said.

"The weaknesses of the 'big society' should not blind us to the policy and political dead end of the 'Big State'," he wrote.

"The public won't vote for the prescription that central government is the cure for all ills for the good reason that it isn't."

Interestingly David Miliband stood at the Bar of the House of Commons on Tuesday to watch his brother deliver a strong performance attacking David Cameron on his recent European Council summit. The essay is likely to have been written long before this.

Mr Miliband's seven-point plan also included: balancing the aim of equality with an embrace of the ideas of merit, rights and responsibilities; support for devolution of power to local communities; "a politics of economic growth, not just redistribution and regulation"; and continued modernisation of party structures - possibly including open primaries for mayoral candidates.

Labour must learn from Tony Blair's example when he became leader in 1994 that it can update its approach while remaining true to its beliefs, said David Miliband.

"After 1994, we did not say that it was a great pity we had to compromise our principles to meet the electorate halfway; we said that it was vital to reform the statement of our principles to reflect what we believed," he wrote.

"The same was true in a range of policy areas, including health, education and crime. We changed our policy better to fulfil our values, not abandon them.

"That is what we have to do again - not because we have changed but because the world has changed. Rethinking, not reassuring."