Ed Miliband has claimed his plans to reform Labour are more significant than the modernisation of the party carried out by Tony Blair.
The package, which will be voted on at a special conference on March 1, will change Labour's links with the trade unions and allow people to have a say in the party's leadership contests without being full members.
The Labour leader said the "seismic changes" were an attempt to increase public involvement at a time of declining political party membership.
Under the plans, for £3 people can have a vote in the party's leadership elections and involvement in the movement as registered supporters or, for trade union members, affiliated supporters.
Mr Miliband told The Independent the plan went further than Mr Blair's symbolic scrapping of Clause IV of the party's constitution, which committed it to nationalisation.
"Clause IV was a symbol of what we believed," he said. "But this is bigger than Clause IV in its impact on the way it will change politics."
Labour has acknowledged the party will take a financial hit as a result of the changes to the union link, but hopes that by building an individual relationship with thousands of new supporters it will be able to attract donations from them and involve them in campaigning.
Mr Miliband said: " This is about addressing the discontent people feel about politics, and opening ourselves up.
"We are not going to be a shrivelled, shrinking band of people. We have got to find new ways of getting people into our party.
"We are trying to buck the trend of what has been happening to political parties around the world. They are facing declining support.
"There are millions of people from every walk of life and, for the first time, we are saying they can be part of our party without having to go so far as joining it.
"By anyone's estimation, I think these are pretty seismic changes."
In a criticism of his predecessors Mr Blair and Gordon Brown, he stressed the importance of grassroots politics.
"You are more likely to achieve things and make change happen if you are a real presence on the ground," he said. "Why? Because you are more likely to win arguments door to door, street by street, neighbourhood by neighbourhood. And you are more likely to get ideas filtering up from the ground to government."
He added: "We would have been a better government (under Tony Blair and Gordon Brown) if we had been listening to people on the ground."
Insisting he would also like to see a change in the way politics is conducted in the Commons, Mr Miliband criticised the way Prime Minister's Questions was conducted, arguing it was "irrelevant" to people outside Westminster.
Commons Speaker John Bercow has written to the party leaders to find ways to curb the "yobbery and public school twittishness" of their MPs at the weekly session following a Hansard Society study which found that PMQs put people off politics.
Mr Miliband said: "It is actually irrelevant. It's watched by a few hundred people in Westminster but it doesn't travel beyond Westminster and that should make us all pause for thought.
"I have a simple view. If people think politics will make a difference then they will get engaged. If they think it is just a bunch of blokes shouting at each other then they won't."