Labour leadership hopeful Liz Kendall has said the party lost the election because it did not "trust" people to make their own decisions as she signalled central government control should be curbed.
In speech on devolving power from Westminster, the MP spoke of how Labour has to let people "do things for themselves", and suggested the party had too often sought "to regulate, to restrict, to fix, or ban" to solve the country's problems.
The MP, seen as the keeper of the Blairite flame in the leadership race, said Labour has become a "very centralised, statist party" - at odds with its roots in the trade union movement and forming the welfare state - when asked whether she wants to tackle the "nanny state".
That the state has too much control of people's lives is often a complaint raised by strands of the Conservative and Liberal Democrat parties.
In a speech in Brixton, south London, she said: "People didn’t trust us on the economy or with their taxes – which is the basic test for any party that wants to govern. And we didn’t offer a positive alternative of a better life that everyone could feel part of.
"But there’s another, deeper cause of our defeat. We didn’t trust the people of this country.
"Our answer to too many of the problems we face as a country was to regulate, to restrict, to fix, or ban. Too often, we spoke as if the challenges facing Britain could be solved by Westminster politicians and Whitehall civil servants alone."
When the NHS was created in 1948, she argued, Labour brought together a "patchwork" system of healthcare but hospitals were still "rooted in the communities" with local representatives on the board.
She argued Labour's "best moments" were when it recognised "equality is about more than tax and spend alone", pointing to the need to embrace "self-respect, dignity and a sense of control over our own lives".
Policies proposed under a "new political settlement" included power "radically devolved" to nations, cities, towns and counties, and backed the formation of an English Labour Party.
"Labour has been too timid on devolution in the past," she said.
In a question and answer session, when asked whether she was challenging the notion of an over-controlling "nanny state", she explained how the Labour Party being forged out of trade unions and co-operatives with "ordinary people coming together to help each other" - and the creation of the NHS and the welfare state was an extension of this principle.
But she added: "Over time we became a very centralised, statist party that lost sight of those earlier traditions. Which gave people more power and control over their own lives."
She added: "Too many people think we don't believe in work, and responsibility, taking care of yourself and your family. That we too often do things to people, for them, rather than with them. I don't want control of people's lives, I want people to take control of their own lives."
Ms Kendall has been the most outspoken leadership candidate on the need for the Labour Party to take a more robust stance on benefits.
She backed a cap on welfare and supports acting party leader Harriet Harman who has she signalled Labour would not oppose George Osborne's latest wave of reforms, to be voted on tonight, to the chagrin of some MPs and leadership rival Andy Burnham.
Throughout the campaign, Ms Kendall has been painted as the right-leaning candidate - and a jibe by Yvette Cooper claiming rivals had "swallowed the Tory manifesto" were thought to be aimed at her.
Ms Kendall said: "I know this is a hugely difficult issue for all of us and our party. None of us want to see tax credits for low paid or poor families being cut.
"What Harriet said was the Tories can do this because they won the election, and one of the reasons they won the election was people don't trust us on welfare. She was right about that.
"I've heard it day in, day out, and she's right to say if we keep doing and saying the same things over the next five years on welfare, as we did over the last five years, we will get the same result. And the Tories will continue to do those things."