The increasingly bitter "battle of the Milibands" reaches new heights today as younger brother Ed dramatically ditches New Labour and calls for an end to the party's drift towards "brutish" and "unjust" US-style capitalism.

As the two brothers enter the final lap of the Labour leadership race, David Miliband, by contrast, declares New Labour to be "living and breathing in every community" as he announces himself "ready to lead" its renewal.

All five candidates will step up campaigning this week as ballot papers are sent out to some 200,000 Labour supporters. The winner will be announced on 25 September, the day before Labour's annual conference in Manchester.

Writing in today's Observer, Ed Miliband raises the stakes as he positions himself firmly to the left of his elder brother, who is more closely associated with the Tony Blair era. Drawing a deliberate distinction with the joint architect of New Labour, Peter Mandelson, who once said he was "supremely relaxed about people getting filthy rich", the former energy and climate change secretary also promises an assault on pay inequality that will consign such views to history.