The Labour Party lacks the courage and big ideas to win back lost voters, MP Andy Burnham, a frontrunner to become the party's new leader, will say today as Labour battles to define its political identity after a painful election defeat.

Labour is searching for a new leader after Ed Miliband resigned in May in the wake of the centre-left party's heaviest election loss since 1987, at the hands of Prime Minister David Cameron's Conservatives.

The leadership contest, which will be decided on September 12, has sparked an acrimonious debate about the political direction of the party. Some have argued for a radical shift to the left, while others want a return to the centre ground which brought the party its last spell in power between 1997 and 2010.

Burnham, bookmakers' favourite to win the four-person race, will seek on Tuesday to turn the in-fighting to his advantage, framing himself as the reform candidate in a speech entitled 'Recapturing the spirit of '45' – a reference to Labour's Clement Attlee who won a surprise election victory in 1945.

Burnham will say the current Labour Party lacks the courage and capacity to champion major reforms like the creation of the National Health Service under Attlee in 1948, saying his party has become "frightened of its own shadow".

"It has become a purveyor of retail politics, trading in the devalued currency of policy gimmicks designed to grab a quick headline but which don't change the world," Burnham will say in a speech today, according to advance excerpts.

The speech will address a surprise surge in the popularity of hard-left leadership candidate Jeremy Corbyn who wants large parts of the economy renationalised and last week came top of an opinion poll among those eligible to vote in the contest.

Corbyn's candidacy has been seen as evidence of a desire for Labour to tack left, prompting dire warnings from more centrist elements of the party, including former prime minister Tony Blair.

Burnham said Corbyn's popularity instead reflected a desire for Labour to campaign on "ideas that don't just change headlines, but change the world".

"What our members are telling us is that they are yearning for a different style of politics from Labour and a break with the bad habits of the past," he will say. "They are sick of politicians speaking in soundbites, sticking to the script and looking like they don't believe a word they are saying."