The Tories today renewed a pledge to allow public sector workers to run services by forming cooperatives.

Shadow chancellor George Osborne hailed the policy as the biggest shift of power to workers since Margaret Thatcher introduced the right to buy council houses in the 1980s.

Under the proposals, the staff of taxpayer-funded services such as primary schools, job centres and nursing teams would enjoy freedom to decide how they were run - within certain national standards.

David Cameron launched the Conservative co-operative movement in 2007, insisting that such groups embodied core Conservative values, and it was time to reclaim them from the political left.

Over the weekend he launched a direct appeal to Labour supporters to keep an "open mind" about backing his party at the general election, and declared that the Tories were very much on the "centre ground".

Osborne told the BBC that the move was "pretty radical". "This is as big a transfer of power to working people since the sale of council homes in the 1980s.

"We are saying to public sector workers: 'If you want to, and only if you want to, you can create employee-led co-operatives and you can run state services, paid for by the taxpayer'.

"This is a power shift to public sector workers so that they take control of their own working environment and they get away from these top-down bureaucracies which have made life a misery for so many people in the public sector."

But the general secretary of the Co-operative Party – a sister organisation to the Labour Party – said the Conservative proposals were “clueless”.

“The Tories don't understand co-operative values,” Michael Stephenson said. “Just as Cameron's Conservative co-operative movement turned out to be neither a co-operative, nor a movement, George Osborne's plan for employee-run public services fails to balance the needs of consumers, the public, with the interests of public sector workers themselves."