George Osborne says it could impose discipline on ministers
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The Conservatives want to allow taxpayers to go online and find out how their money is being spent.
Shadow chancellor George Osborne is proposing legislation requiring the Treasury to set up a website revealing all expenditure over £25,000.
He will challenge the government to back the bill, to be presented to the House of Lords by Christmas.
"For too long, government spending has been shrouded in Whitehall secrecy," Mr Osborne said.
The only exemptions would be spending related to national security or that which concerns personal matters covered by the Data Protection Act.
Examples of spending which would be revealed includes the overhauling of the NHS computer network and travel arrangements for ministers.
Mr Osborne, in a speech focussing on politics and media in the internet age, said that while the "media is waking up to the democratisation of information... the government - particularly in this country - is still fast asleep."
"Secrecy remains the watchword. 'Westminster knows best' remains the assumption," he said.
Taking the US as an example, Mr Osborne said taxpayers should be able to access information online about where their taxes were being spent.
In the US, a website is to be set up under the Federal Funding Transparency and Accountability Act allowing citizens to search for information on spending.
Mr Osborne also said the growing popularity of social networking, on websites like MySpace and Bebo, was having an impact on politics.
"People are no longer prepared to sit and be spoon-fed. They are taking matters into their own hands through their blogs and online networks and user-generated content."
Blogs
Bloggers offered commentary on politicians and political events, as well as journalists who Mr Osborne accused of the "blurring...commentary and reporting".
"There is the looming threat of the permanent campaign - where the politician is never allowed to be off-record or off-guard," Mr Osborne said.
A more open relationship between politicians and the public, where policies are posted on party websites and the public is invited to comment, was applauded by Mr Osborne.
"It is the very reverse of the usual, secret policy-making approach which political parties have traditionally favoured.
"But we think it is in tune with the times in which we live".
If the Government Spending Transparency Bill clears the House of Lords it would then go before the House of Commons for approval. It would then only survive if there was a sizable rebellion by Labour MPs.