Only new ideas will help Labour at the next election, Peter Mandelson believes
Labour must not use the financial crisis as an excuse to revive its economic policies of the early 1980s, Peter Mandelson has warned.
He said there would be no return to the 1983 manifesto - dubbed the "longest suicide note in history" for its emphasis on state economic control.
The business secretary told Progress magazine the idea that Labour should reject market economics was "absurd".
He also described his recent return to the cabinet as "coming home".
The newly ennobled Lord Mandelson said: "I have come home to my political family from which I became estranged, not through my own choice."
Since returning to government, Lord Mandelson has been caught up in a bitter political row over alleged attempts by the Tories to solicit a donation from Russian billionaire Oleg Deripaska, a claim they deny.
Lord Mandelson, whose own links with Mr Deripaska while he was EU trade commissioner are under intense scrutiny, said the Tories "hate me, for perfectly understandable reasons from their point of view".
Addressing the current state of British politics, he said Labour had been "through a bit of an unhappy period but we've rediscovered ourselves as a party, a government and a political family".
Labour's handling of the financial crisis had shown the electorate the value of experience in government and given the party an opportunity to show the public "we are in touch again".
The next election was far from lost, he insisted, although he said this reality had "yet to fully dawn on our own party".
Labour must show it can come up with radical ideas and develop a "new political project" to win the trust of voters, he said.
Policy areas to be prioritised, he added, included improving social mobility, creating jobs in new industries and public sector reform to give more choice to parents and patients.
"We cannot wait for the next election to produce some major policy sparks and reignite interest in us and our future agenda."
But the government's rescue of the banking sector did not justify a return to the policies of the early 1980s when Labour advocated public ownership of key industries and central economic planning.
"I think there is a danger that some see the financial and banking crisis as an opportunity to resurrect the 1983 party manifesto.
"It is not going to happen. We have all moved on. More than anything, the public is not going to be interested in that.
"I don't believe what has happened is market failure in the financial sector. I believe it is a regulatory failure."