Labour must stand up and challenge the coalition government’s claim that there is no alternative to swingeing cuts, party leadership contender Ed Balls will say today.

The shadow education secretary will use a keynote speech in the City of London to accuse chancellor George Osborne of pursuing an “economically-unsafe” austerity programme which risks tipping the country into a double dip recession.

He will say that it is now imperative that Labour sets out its own plan for tackling the deficit based on a “more sensible timetable” that would continue to support economic growth.

While he will acknowledge that there is a current consensus that deep and rapid cuts are necessary, Mr Balls will say Labour should not be afraid to stand outside it - even if it meant challenging the views of the governor of the Bank of England.

At the same time he will warn that they cannot afford simply to wait for support for the coalition to fall away as the cuts begin to bite.

“In my view, to sit back and wait for the pain to be felt is a huge trap for Labour,” he is expected to say.

“Because in the meantime, the clear strategy of the coalition government is to persuade the public both that there is no alternative, and that - however much George Osborne boasted of his own fiscal austerity before this audience - all their decisions are the fault of the previous government.

“We need now to win the argument for an alternative economic plan that is rooted in economic history and analysis, as well as in Labour values and principles.”

Mr Balls will dismiss Mr Osborne’s argument that slashing spending and benefits while raising VAT would not hit growth and employment prospects because the private sector would “somehow rush to fill the void”.

“This is growth-denial on a grand scale,” he will say.