The Tories have renewed a pledge to give public sector workers the chance to form co-operatives to run services.

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.

We would be making sure, as taxpayers, that we were getting value for money and it was appropriately run and the standards the kids were being taught to were at the right level and the like. So it is not a complete free for all

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

Opposition leader 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.

Mr Osborne told BBC Radio 4’s Today programme the move was “pretty radical”.

“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.”

He denied that it would result in a “free-for-all”.

“The check on quality here is that they would be contracting services to the local authority or the national health service and they would be providing a contract, for community nursing or for primary education.

“And we would be making sure, as taxpayers, that we were getting value for money and it was appropriately run and the standards the kids were being taught to were at the right level and the like. So it is not a complete free for all.

“One would hope that in any organisation where the bosses had completely lost the confidence of the staff then one would look at the future of those bosses,” he told the programme.

NHS staff working in primary and community care already have a “right to request” that their organisation becomes a social enterprise, although take-up has not been very high despite Department of Health encouragement.