Labour spin was begun as a strategy "to protect Blair"
Alastair Campbell, government director of communications and strategy, said the party had often been more worried about the perception of government than the effectiveness of policies in the long-term.
This had led to journalists becoming obsessed with trying to catch ministers out over "trivia" rather than report the real story, he said - with the public ultimately losing out on the real message.
It stemmed from trying to shield Prime Minister Tony Blair from the harsh treatment meted out to former Labour leader Neil Kinnock.
"A lot of what we were about was making sure that did not happen to Tony," he said.
"The story of how we managed the media in the end became something of significance in itself.
"For a while, that was seen as something positive, because the Tories had always had a monopoly on professionalism and presentation. And in opposition all you have is words: you can devise policies but you can't change people's lives.
'Problems'
"But when we came into government, if I were honest about the whole thing, we hung on to some of the techniques and ways of opposition for too long.
"I don't know if things could have been done differently to prevent the spin thing becoming so huge."
Mr Campbell last week announced changes to the way Downing Street conducted its briefings for Lobby journalists designed to help move away from obsession with "trivia".
He accepted there had been "problems" in Labour's first term with re-announcements of policies and initiatives, but laid some of the blame on the increasing appetite of 24-hour news and the newspaper industry.
But likening the relationship with the media to a "dialogue of the deaf" at times, Mr Campbell said that accusations and counter-accusations of spin and obsession with trivia harmed voters.
"The press on one side, saying we just spin you a line the whole time, then us on the other side, saying that you are obsessed by trivia...
"The victims are the public who don't think it has anything to do with them whatsoever," he said.
'Too fast'
"There has to be some common ground (between the government and the media) about how we can make this process more relevant to people and their lives.
"Everything has to be a 'massive scandal' - never a 'minor scandal' - or it has to be the 'worst crisis yet'.
"But the way it is being reported is just aiming off all the time.
"You want to report everything as if it's 100 miles an hour in the fast lane, but most people are living in the middle lane and don't want to go that fast."
Mr Campbell said the proposed reforms to the Lobby system would help journalists "slow down", and allow them to report on issues in a more informed way rather than concentrate on what he calls "non-stories".
Professional outlook
The government had also learned from experience and was less concerned about the kind of press it was getting, he said.
Peter Mandelson, the campaign manager for Labour's 1997 general election campaign, said much work had been needed to make government communications more professional.
But speaking on BBC Radio 4's Today programme, he continued: "It is the case that we carried on operating in government rather too much as we were operating in opposition."
Mr Mandelson added: "I think it's typical of Alastair's bigness and his insight that he can make an observation like that."