A Labour-SNP alliance would be possible under a future government led by Jeremy Corbyn, the leftwing leadership candidate has suggested.

Mr Corbyn rejected the opposition to such a deal set out forcefully in the last days before the May General Election by Ed Miliband.

The Islington North MP – asked in an interview by Novara Media if he would say the same as Mr Miliband, that he would “rather see a Conservative majority government than a Labour-SNP coalition” – replied: “No, I wouldn’t. I would say I want there to be a Labour majority government.

“If there’s not a Labour majority but a minority(government) and we have to work with other parties, probably based on a day-to-day arrangement or a(confidence and) supply arrangement, then do that.

“Obviously, you have to work with other parties to get things through and I would be prepared to do that,” added Mr Corbyn.

In the final days of the election campaign, Mr Miliband strengthened his language on the possibility of a Labour minority government going into an alliance with the SNP. Having earlier ruled out a formal coalition and a confidence and supply arrangement, this left open the remaining option of an issue by issue arrangement.

But during a BBC Question Time appearance in Leeds, the then Labour leader went further, saying he would not form a government if it meant doing any kind of deal with Nicola Sturgeon.

He said: “Let me be plain. We’re not going to do a deal with the Scottish National Party; we’re not going to have a coalition, we’re not going to have a deal.

“Let me just say this to you: if it meant we weren’t going to be in government, not doing a coalition, not having a deal, then so be it. I am not going to sacrifice the future of our country, the unity of our country; I’m not going to give in to SNP demands around Trident, around the deficit or anything like that.”

Last month, Alex Salmond, the former First Minister, praised Mr Corbyn as a “serious politician”, who had clear-cut views. The Gordon MP made clear that, while there were issues on which the SNP and the Labour leadership candidate disagreed, there were others such as opposition to austerity, welfare cuts and Trident renewal on which they could “co-operate”.

Meantime, launching his policy for the Labour leadership, Andy Burnham insisted his plan to renationalise the railways would "finance itself".

The Shadow Health Secretary has promised to bring lines back into public ownership as franchises expire, pointing to the £1 billion handed to the Treasury while the East Coast mainline was under Department for Transport control following the collapse of its previous franchise.

The MP for Leigh near Manchester also said it was vital to "have a plan" for the public finances and the deficit but insisted Labour had to have a fundamentally different economic policy to the Tories if it wanted to cut through to voters.

The bookies’ favourite to succeed Mr Miliband admitted Mr Corbyn had "lifted the debate" in the leadership contest by surging to the front of the race.

Promoting his manifesto that has at its heart policies aimed at helping Britons “get on”, Mr Burnham was challenged on how much his plan to renationalise the railways and cut fares would cost.

He told the BBC: "I am not saying you would at a stroke of a pen try and renationalise the whole lot. I am saying as franchises expire, we should bring them back under public control.

"We saw that with the East Coast, where the public sector ran the line for a period of time. What that did is it produced a billion pounds that went back to the Exchequer; that was then used to keep fares lower."

Pressed on how much he would spend to achieve the goal, Mr Burnham said: "It can finance itself because the money that can be generated can come back into supporting it."

He added: "Our railway system costs 40 per cent more to run than comparable systems across Europe.

"The money we are putting in (now), those public subsidies, are not going to the benefit of the travelling public. Everyone listening, who gets fleeced at the ticket machine every morning, knows the truth of that."

Mr Burnham's plan came as internal research suggested anti-austerity policies were a vote loser and Labour's defeat at the General Election was caused by a failure to persuade the public it could be trusted to tackle the deficit.

It also made clear Labour faced a dilemma in Scotland but the party’s former policy co-ordinator Jon Cruddas, who led the review, suggested political differences between Scotland and England meant Labour had to consider a more federal approach to policy-making.

Ballots for the party leadership go out next Friday. The new leader will be announced at a special conference in London on September 12.