Only the Lib Dems are intent on giving people more power, Mr Clegg said
The Liberal Democrats are poised to replace Labour as the true progressive force in British politics, their leader Nick Clegg has claimed.
Mr Clegg said, ahead of his party's conference the real choice at the election would be between "yellow and blue" - the Lib Dems and Conservatives.
He called Labour a "spent force" and the Tories "ideologically barren".
Lib Dem plans for big spending cuts in some areas, which some members oppose, are set to dominate the conference.
Mr Clegg will seek the support of his party to balance any future spending pledges with corresponding cuts elsewhere, a stance some on the left of the party are uncomfortable with.
Laying out options for future savings, Treasury spokesman Vince Cable said on Wednesday that defence spending, "middle class" tax credits, costly IT projects and public sector pay and pensions were all areas that should be looked at.
In an interview with The Times, Mr Clegg said Labour was incapable of "meeting the challenges of the modern world" because of its belief in centralizing power.
"Labour has misread the demand for individual and grassroots empowerment in contemporary Britain," he said.
In contrast, the Lib Dems' position on taxation, civil liberties, constitutional reform, public services and environmental issues reflected the public's desire for a more equitable society and for government and big business to be more accountable.
Appealing to "disaffected" Labour voters, he said his party was ready to take on the mantle of progressive politics from Labour just as Labour had eclipsed the Liberals in the 1920s.
A "radical shift" in power was taking place in a host of British cities, particularly in the North of England, he said.
While they had been dominated for years by Labour, cities like Liverpool, Newcastle and Hull now had Lib Dem councils and were viable targets for his party at the election.
However, he denied the party was now vulnerable to the resurgent Conservatives in the south of England, where the party is defending a number of marginal seats.
"Our determination to replace Labour will not, as some predict, damage us in the South where we have won seats from the Conservatives," he said.
"We are confident that seats we hold in the South West will be resistant to the synthetic charms of Mr Cameron's Conservatives."
The Conservatives have sought to portray themselves as the new radicals in British politics.
Shadow chancellor George Osborne claimed recently that only the Tories had the "progressive" ideas to reduce government expenditure, in order to tackle the deficit in the public finances, without harming frontline services.
Labour says both opposition parties have opposed measures it has taken to support jobs and homeowners during the recession.
Business Secretary Lord Mandelson has told Labour must act like an "insurgent not an incumbent" if it is to win the next election.