Labour's vagueness over how it would reduce the deficit, and the party's failure to address the political consequences of long term austerity are preventing the public from trusting its leaders on the economy, a group of party activists warn in an intervention intended to open a debate about Labour's economic and political strategy.

The pamphlet, published by Policy Network and written by former party advisers, mirrors an intense debate inside the shadow cabinet on how to restore the party's economic credibility.

The group, describing itself as "In the Black Labour", argues: "It is precisely the vagueness of Labour's position over its short to medium term plans for the deficit that confirms the voters' worst suspicions about the party's lack of commitment to addressing the fiscal crisis.

"Taxpayers, voters and lenders to the British state feel they have a right to know what the main opposition party would do about high levels of borrowing and when they would do it by. Satisfying this demand is fundamental to being regarded as a credible alternative government. But this is not simply a matter of electoral calculation: certainty and stability are genuinely prized economic possessions which HM Opposition should uphold as much as the government.

"Some may feel that opposition parties should avoid being pinned down on their plans too early in the electoral cycle. While this may be good political advice under normal circumstances, in the current case it is highly questionable."

A fresh poll published by YouGov shows trust in the coalition economic team has strengthened this week despite the dire growth forecasts in the autumn statement and the strong Labour attack asserting George Osborne's Plan A has failed.

The YouGov poll shows 30% pick George Osborne as best chancellor, with shadow chancellor Ed Balls on 24%, compared with a lead of 25% to 23% in July. The same poll shows voters blame the economic crisis on the euro, the debts run up by Labour, or the banks before they blame the coalition government.

Critics of Labour economic strategy argue Miliband and Balls should stop focussing their energies on attacking excessive Conservative cuts in 2010, and instead focus on restoring Labour's own fiscal credibility. The group – most of them former Labour advisers – say the party needs to adopt clear fiscal rules, promise to give the Office for Budget Responsibility a more proactive warning role, and finally spell out that it can no longer achieve its goals through higher spending.

"The reality of our fiscal situation means that any future Labour government must look to reforms rather than spending to advance centre-left goals", they say. Priorities are "the true currency of politics in an era of limited resources," they state.

In an accompanying piece in today's Guardian, they warn this week's autumn statement – setting back the date by which the deficit will be cleared – will be the dominant issue at the next election: "Whatever it thinks about the mistakes the Tories have made to cause higher borrowing, Labour must be completely honest about the constraints it will face at the next election – and soon".

The pamphlet may be dismissed by some as the last gasp of New Labour, but senior members of the leader's office are due to attend a private launch event next week, suggesting the argument has currency. One of the authors Adam Lent, a former TUC head of economics said: "There is a blockage that is preventing voters listening to Labour on the economy, and the answer lies in showing urgently that it takes the deficit seriously. This cannot be put off until later. What people hear now is that Labour is arguing for more spending."

The authors also claim they are not rejecting a limited role for state demand management, or proposing Miliband issue a fresh "mea culpa" about Labour's economic record in government.

They say "it is now widely accepted that while the rules adopted by Gordon Brown were sensible in principle, they were too vague and too easily evaded in practice. In particular, linking borrowing and spending directly to the economic cycle – then making the timing of that cycle open to interpretation – was a mistake."

One option would be for the party to commit itself to a surplus on public finances over the parliament.

Miliband currently says the party would still be following Alistair Darling's plan to halve the deficit in this parliament.

The authors also say the OBR, introduced by the Conservatives, should be empowered not only to issue traffic warning lights if it believes a government is off track in reducing the deficit, but also to set out remedial measures, a substantial widening of the OBR remit.

They also urge Labour to come to terms with the fact that an incoming Labour government will have to cut. They write: "Labour's criteria for spending choices should be based on a simple question: will a spending option directly boost short and long- term growth and create jobs? This may mean very constrained funding for healthcare, pensions and welfare for the foreseeable future. It's tough, but the alternative is ducking the genuine decisions nearly every government of an advanced economy currently faces."