Long before this year's general election, David Miliband and Jon Cruddas were engaged in what their supporters described as "back-channel talks" over what would happen when Labour lost power - as both knew the party would - and Gordon Brown was forced to resign. Neither man was a supporter of Brown and each longed to remake the Labour Party as something bolder, more pluralistic and collegiate. Many on the left of the party were urging Cruddas, who stood for the deputy leadership in 2007, supported by the powerful Unite union, to stand for the leadership as well. "There are circumstances in which Jon could run and win the leadership," his friend Neal Lawson, chair of the Compass group, told me in February.

But even then, Cruddas and Miliband were working towards a deal: Miliband would stand for the leadership, with an explicit endorsement from the MP for Dagenham; Cruddas would seek to become chairman of the party, if it became an elected position.

This week, and long after he had declared that he would not be a contender for the leadership, Cruddas finally made that explicit endorsement of David Miliband in an interview with the New Statesman. "I'm doing this," he told me, "because of a couple of contributions he's made - one was the column on Englishness he wrote in your magazine [see our 5 July issue]. Another was his Keir Hardie Memorial Lecture [on 9 July]. What was interesting to me about this was when he started talking about belonging and neighbourliness and community, more communitarian politics, which is where I think Labour has to go. He's the only one [of the leadership contenders] that has got into some of that."

In a column in last week's New Statesman, Maurice Glasman, an academic who has worked with the increasingly influential London Citizens movement for the past decade, warned of how, through the rhetoric of the "big society", as well as their desire to redistribute power from the overweening state to the citizen, the Conservatives had seized Labour's language and history by "stressing mutual responsibility, commitment to place and neighbours and the centrality of relationships to a meaningful life, and by laying claim to the mutuals, co-operatives and local societies that built the labour movements". This is language that Keir Hardie himself would have understood.

“I very much echo where Maurice is on some of this," Cruddas says now. "What is interesting is that David more than anyone has attempted to listen and respond to some of those ideas. At times, he stumbles a bit because this is a major shift in orientation for Labour - or a reorientation back to what Labour was, pre-dating the new left-liberalism."

Cruddas continues: "David is not just going down a checklist of policies; he seems to me to be echoing a more fundamental sentiment, in terms of what Labour needs to do. I'm much more interested in that, rather than in just reciting some policy options, because the scale of the defeat was so great. It's a much more fundamental question of identity that we need to return to.

“I disagree with him on a lot of policy but I think, in terms of the nature of the leadership that's needed, he's beginning to touch on some of those more profound questions that need to be addressed head-on. What is the nature of the reckoning? We should not just be running from the record but having a nuanced approach to some of the things that went wrong, as well as defending the things that went right."

David Miliband is moving towards a new pluralism. It is slow-paced and tentative but it is sincere: all part of an attempt to remake himself, unburdened by office and free from having to speak in a language of power in which he no longer wished to be articulate - the language of New Labour in its terminal phase. "There's a pluralism I detect in him that I hadn't witnessed before," agrees Cruddas. "We see it around issues of party reform, devolution and local government, and around the question of national identities within Labour - are we heading towards a federal form of Labour, for instance? And, actually, he's not just attacking the Liberals, as some of the others have."

Condemning Lib Dems

This could be taken as a reference to his brother Ed Miliband's comments in our last issue, in which he said he would not work with Nick Clegg, and his subsequent attacks on the Liberal Democrat leadership during an address in Scotland, in which he spoke of eliminating the Lib Dems as a political force. So much for a progressive alliance.

“I think it's a mistake to attack the Liberals," Cruddas tells me. "We should have a much more subtle approach to this, because what we're seeing is the first major political realignment following the economic crisis. The question is: what is the equivalent centre-left response to this moment of rupture? Attacking the Liberals is wrong. There's a danger of us spraying too much lead across the forecourt and not really thinking about how we need to regroup. We need to have respect for and show courtesy towards different traditions as part of an overall, plural realignment across the centre and the left - that's what's going to be needed. Arguably, the era of majoritarian [sic] victories by single parties is at an end." Even under first-past-the-post?

“Yes. That's why we have got not just to resuscitate questions of political change for the party but form a more radical approach to constitutional change and electoral reform. Again, I haven't seen where David will end up on that, but some of the signals he's sending out are interesting ones."

Cruddas is a supporter of full proportional representation; David Miliband prefers a move to AV, but nothing more. "I would wish him to [support full PR]. I don't think some of the things he's said have actually acknowledged the scale of the problem that Labour faces. We didn't just lose: we got fundamentally hit as a political party, in terms of what people consider us to be about and the very essence of what Labour is. He seems to me to be the only one beginning gradually to acknowledge the scale of the defeat - I mean culturally, economically and in terms of social policy."

Cruddas has spoken to me in the past of how the Iraq war is a source of shame and profound regret for Labour. I know people who admire David Miliband, as I do, but who feel they cannot endorse his leadership because he refuses to acknowledge the historic crime that is the illegal invasion and occupation of Iraq, and all that has flowed from there - including the radicalisation or disenchantment of a generation of young British Muslims.

“I think there is a danger of us becoming too introverted and saying things that people want to hear . . . which actually become synthetic, in terms of the positions we already had in the past. I mean that in a generic sense; that's the generic qualities of elections themselves, in that they become internally focused. On the Iraq issue, I think he has acknowledged some of the problems post-invasion. I would have liked him to have gone further in terms of acknowledging the pre-war failures as well but I also respect the way he's done it. It would have been easier for him to say a lot more, but possibly more synthetic. It is a big question. Part of what I like, even though I disagree with him on some of it, is that leadership is not about jettisoning things. It's not about running away from our own culpability."

There persists a sense, unfair though it might be, that Miliband is too much the Blairite, hence the support he has had from the Blairite establishment, those who are left inside the party and those who are outside it. "On Blair," Cruddas says, "I knew David when he was in Downing Street [before he became an MP] and he was a much more rounded political figure than those who are attempting to caricature him as a one-dimensional Blairite or a late-Blairite. Blairism was a much more collegiate, coalitionary [sic] project from 1994 to 2001. The contortions happened after 2001 and were interlinked with the Iraq question. I think the David Miliband I know will try to resurrect that deeper, broader coalitionary politics around Labour - not just coalitionary within parties; it's around them as well. Tapping into other social movements and so on."

State of play

I agree with Cruddas that it is unfair to caricature Miliband, as I discovered when I travelled with him to India in January 2009. He has shown himself to be as willing as his brother to criticise the record of New Labour in office, though he also argues, with some reason, that the party was "insufficiently proud" of its record during the recent election campaign. He understands that the smart response to the "big society" is not simply to dismiss it as Thatcherism with a human face, but rather to see it as a philosophical challenge - a challenge to Labour to escape from a strain of paternalist authoritarianism that has long been part of its thinking. "Default statism", he has rightly argued, is no longer enough for the party.

“I know its functional for people to caricature Miliband as some sort of late Blairite, but that was never the guy I knew. That's partly why he left Downing Street, by the way; he didn't embrace some of the more full-on versions of what it [Blairism] became. It was a much more balanced, radical political movement in its early knockings. Now you have a bastardised Blairism that people are trying to define Miliband as [part of], whereas he always belonged to the more thoughtful elements of Blairism."

At the end of our conversation, Cruddas confirmed that he wants to become chairman of the party. "Yes, I want that. I would be interested if it became an elected position."

What if Ed Miliband became leader and not David? "I don't think this is a zero-sum game. I'm quite impressed with the way that people haven't piled into each other. And, actually, Labour hasn't descended into some internal, factional fight. The question was always going to be whether Labour would be facing a crisis after this election. In order to pull it together, we'd have to build a coalition within the party. That means offering, in a courteous and respectful way, discussion and dialogue across all different elements of the party.

“The stakes are so high in terms of the economic and social carnage that's going to reap its way through the country over the next few years. People will respect nothing other than that coalitionary coming together in the name of a deeper, broader Labour project again."