Mr Cameron called the government's approach "tired and outdated"
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Conservative leader David Cameron has promised to give public sector staff time off to carry out voluntary work.
He also said charities should be allowed to make profits from running government services and use the money to do good more widely.
The Lottery Fund would be renamed under a Tory government and the money reserved for voluntary groups, he said.
Meanwhile, the government has launched a four-month consultation to "raise the esteem" of volunteers.
'Equal footing'
Launching a "green paper" on charity work, Mr Cameron accused Prime Minister Gordon Brown of having a "tired and outdated approach" towards the voluntary sector.
He said his party would make "government practise what it preaches by asking the public sector to allow staff to take time off specifically for volunteering".
Mr Cameron also promised to allow charities to "compete on an equal footing" with commercial enterprises in supplying the public sector.
They could make a profit from this - which is currently forbidden - and put the money back into improving services across the country, he added.
Charities would benefit from longer-term contracts and rules would be simplified to help stimulate donations, Mr Cameron said.
A network of Social Enterprise Zones would be set up to encourage investment in deprived areas.
Mr Cameron told BBC Radio 4's World at One that charities were often not the "third sector" - behind the private and public sectors - but "the first sector", when it came to dealing with social problems such as bad behaviour.
In a speech to launch the Tories' plans, he said: "Every day we see new evidence of things going seriously wrong in our society.
"The social challenges we face today are every bit as serious as the economic challenges Britain faced in 1979.
"And now, just as then, the scale of the challenge demands radical Conservative reform."
But Cabinet Office minister Phil Hope said the Conservatives wanted to return to a "Victorian" era, in which charities did much of the work of government and lost their campaigning role, becoming "a grateful sector".
He added: "What worries me about the Conservative proposals is that they want to withdraw that kind of government support for the voluntary sector and to leave them to sink or swim on their own and I think that's a big mistake."
'Amazing job'
Mr Cameron replied: "That's complete rubbish and you could almost hear the tongue in the government minister's cheek when he was saying that."
Earlier, Health Secretary Alan Johnson spent some time working in a shop in St Bartholomew's Hospital in central London, before launching the government's consultation on voluntary work.
He said: "Volunteers do an amazing job. They are vital to the lifeblood of the NHS and social care services.
"Volunteering does not just benefit patients; research has shown that it makes the volunteers happier too.
"There is a long-established tradition of volunteering across the full range of health and social care settings, indeed the NHS grew from the pre-NHS voluntary hospitals."
Mr Johnson said he wanted "to articulate a clear vision of how volunteering fits into the health, well-being and social care system".
Both Labour and the Tories say they want to strengthen the voluntary sector, arguing it cuts crime, increases social cohesion and makes social and health care more personal.
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