The idea is based on the 'wisdom of crowds' theory
The Conservatives say they would offer a £1m prize in a competition to develop a website that would allow large groups of people to help develop new policies.
Tory frontbencher Jeremy Hunt told the BBC the idea was to tap into the "huge amount of expertise" among the British people to avoid policy "howlers".
The prize would be public money - from the Cabinet Office budget - but he said it could offer taxpayers good value.
Labour and the Lib Dems dismissed it as a "gimmick" and a publicity stunt.
The plan - to be introduced if the Conservatives win the next general election - appears to be based on the so-called "wisdom of crowds" theory written about by author James Surowiecki.
He argued that large groups of people are smarter than the elite few at coming to wise decisions.
Mr Hunt, the shadow culture secretary, said on BBC Radio 4's Today programme: "Look at the U-turns over child care vouchers, over the 10p tax, over the NHS IT system.
"It is crazy that these things have gone wrong when you've got lots and lots of, for example, retired health professionals, retired policemen, people in the teaching profession, who have huge knowledge and expertise...
"Is there a way that we can use the internet ... to try and avoid some of these howlers so a future Conservative government can not just have good policy ideas but execute policy in a much more considered and thought-through way?"
'Public relation stunts'
Mr Hunt said they wanted to look at ways of prioritising ideas from people who might have greater expertise in certain areas, or a good track record on offering ideas.
And he said the £1m would only be given away if a solution was found and a functioning website delivered.
He said: "We think £1m is about the right amount if we are going to get some serious IT development done and if we do that we think it could be a lot better value for the taxpayer than the £12bn spent on the NHS IT system."
For the government, Cabinet Office minister Tessa Jowell said the Conservatives were "opting for a PR gimmick over policy substance" and predicted the idea would be "quietly dropped".
"Families want serious, thought-through policies that meet their aspirations, not short-term public relations stunts," she said.
For the Liberal Democrats, Work and Pensions spokesperson Jenny Willott MP said: "This prize is clearly a publicity stunt and a total waste of taxpayers' money.
"There are already a multitude of ways to communicate with large numbers of people online, from Facebook to discussion groups.
"Maybe the Tories are so out of touch they don't know what's out there, but they shouldn't waste £1m of public money reinventing the wheel."