ED Miliband will today promise to extend the devolution revolution that created the Scottish Parliament to England, pledging a greater share of power to towns and cities, amounting to £20 billion over the next five-year Westminster parliament.

In a keynote speech in Birmingham, the Labour leader will target "new middle income quality private sector jobs" as crucial to restoring the broken link between growth and living standards.

In what he will describe as the biggest devolution of power to England for 100 years, Mr Miliband will declare the era of centralisation in London over.

He will insist his promise to double devolved funding will be included in Labour's election manifesto as another key component of Labour's One Nation plan to "halt the race to the bottom - in wages, skills, prospects and productivity - which has left millions of families in the grip of the cost-of-living crisis".

The party will announce the process of further devolution has already begun with he and Ed Balls, the Shadow Chancellor, writing to the leaders of every council, university and Local Enterprise Partnership south of the border, inviting them to draw up joint plans to boost growth and private-sector jobs in their regions. Those regions, which meet strict tests established by the party's internal Adonis Review, will be given new powers over transport and housing infrastructure funding as well as for the Work Programme and skills.

Last month, Johann Lamont, the Scottish Labour leader, announced the results of her party's internal review on more devolution ahead of the September referendum, pledging more powers for Holyrood to set income tax rates with control of housing benefit, elections and railways.

Mr Miliband will emphasise the central mission of the next Labour government will be to restore the link between the wealth of the nation and family finances. He will ridicule Tory claims that the weaknesses of the economy have been fixed or the cost-of-living crisis has been solved, highlighting figures showing how middle-income salaries will lag behind growth for years to come.

Mr Miliband will say: "The country of the industrial revolution has ignored the lessons of its own history for far too long; the country that once built its prosperity on the great towns and cities like Birmingham, Bristol, Liverpool, Manchester, Glasgow and Cardiff, has become a country which builds its prosperity far too much in one city: London.

"We need a prosperous London but we also need to build prosperity outside it. Every region outside London is below the national average when it comes to productivity while London is 40% above it."

He will argue that Britain will never tackle the cost of living crisis and create the essential new private-sector jobs unless a century of centralisation is reversed and the economy is transformed from being based on the success of one city to all of Britain's great towns and cities.

Calling on councils to come forward with their own economic strategy, the Labour leader will promise that those that do "will receive powers and access to resources from Whitehall the like of which we have not seen in living memory; real powers for Britain's towns and cities to make the difference, to help create the jobs we need and the conditions for business to succeed".

But Grant Shapps, the Tory Chairman, rubbished the proposals, noting how "Labour's Great Recession" had created an unbalanced economy so that for every job created in the north, 10 were created in the south.