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More than 40 Labour MPs have called for a radical change in direction for the party’s election strategy.

In a statement reflecting growing unease within the party, they call for a switch away from cuts in favour of investment in housing, public services and climate.

The move represents the largest expression of opposition so far to a developing election strategy that many MPs fear is geared too tightly to outdoing the Tories over cuts.

Since David Cameron’s muddled retreat over the extent of cuts under a Tory government, there are also worries that Labour policy will be left washed up on Tory ground, with the Government pledged to more public sector cuts than the Tories.

The call for a change in direction was echoed by up to 700 activists who attended the Progressive London conference on January 30 and by MPs at an “Investment not cuts” fringe meeting chaired by Tribune.

The MPs uniting around the Coalition for a Labour Victory statement (click here for the full list) called for public investment to tackle the recession, new social targets and bonus clamps for banks, the rejection of privatisation, redistribution of wealth and measures to achieve the 80 per cent carbon emission reduction target for 2050.

The statement has the support of dozens of constituency parties and groups such as Compass and the Campaign for Labour Party Democracy. One of the organisers, MP Michael Meacher, said: “Labour can win if it is prepared to be radical. These policies will resound with Labour voters whose loyalties have been strained. Ed Miliband has invited submissions on what the manifesto should include. We urge him to focus on these principles and break for good with the market fundamentalism of the past 30 years.”

Ken Livingstone told the Progressive London conference: “It is crucial to develop and implement a progressive alternative to the Tories. Progressive policies, to be effective, must support both those on middle incomes and the less advantaged. These together constitute a large majority of the electorate.”

On Tribune’s panel, New Economics Foundation fellow Ann Pettifor argued that Labour should heavily regulate the finance sector and subordinate it to the economy as a whole. MP Diane Abbott argued that an automatic reversion to the cuts narrative was something that meant working-class people would be forced to pay for the follies of the rich. She said Labour had wasted a “phenomenal amount of money”. Ms Abbott went on to decry phenomenal wastage of public money in Private Finance Initiative schemes.

Labour MP Jon Cruddas warned of the political and social effects of cuts and suggested that the roots of the Government’s policy lie in the recent Blairite coup attempt against Mr Brown.