Ed Balls has effectively ruled out rail nationalisation from the Labour manifesto, just hours after it emerged that the party's policy supremo complained of the "profound dead hand at the centre" of the party.
Jon Cruddas, coordinator of the party's policy review, made the comments at a talk he gave to the Compass think tank last weekend which was reported in today's Sunday Times.
He complained that "innovation or creativity" from local activists was being killed off by party HQ to be replaced by "cynical nuggests of policy" which "chime with focus groups".
He added: "Interesting ideas and remedies are not going to emerge through Labour's policy review."
Speaking on the Andrew Marr programme today Balls insisted Cruddas was still on-side.
"I talked to Jon a couple of days ago. He's not frustrated, he's excited," he said.
"We've got big ideas."
But asked if Labour would back the majority of the public who want a return to rail nationalisation, Balls promised only to give public providers an equal chance in the bidding process.
"I dont want to go back to the nationalisation of the '70s. I don't think we want to go back to the British Rail of the '70s," he said.
"In East Coast a public operator has been dong a good job. We're happy for private and East Coast to bid.
"Lets have a competitive process on a level playing field… but without ideology. We're not going to say this is about nationalisation or privatisation."
Labour announced today it was planning to transfer £30 billion of funding from central to local government.
Ed Miliband said he wanted a quarter of government contracts to go to small-and-medium-sized firms.
The comments come ahead of Lord Adonis' report into growth next week.