The Labour Party will on Monday urge the government to build its way out of recession, using funds from the sale of the mobile phone spectrum to pay for more than 100,000 cheap homes and a stamp duty freeze for first time house buyers.
Labour's finance spokesman Ed Balls warned there would be no "post-election spending spree" if the opposition party won the next election in 2015 and ruled out any pledges to reverse specific tax rises or spending cuts, instead promising to evaluate all spending across government departments.
Britain's Conservative-Liberal Democrat coalition government, slashing spending to reduce a record budget deficit, has faced criticism for not doing enough to drag the economy out of recession.
Wary of losing the confidence of financial markets, Chancellor George Osborne has decided against any direct stimulus, choosing instead to offer to underwrite some private funding for infrastructure projects. Labour has argued for a slower pace of deficit reduction to give the economy room to breathe.
Balls said 3 billion pounds ($4.84 billion to 6.46 billion) in expected revenue from next year's auction of the fourth generation mobile telephone spectrum should be used to kick start Britain's struggling construction industry, rather than pay off debt.
"If businesses are going bust, not hiring new workers, you can't get the deficit down. If the economy's not growing, you can't get the deficit down," Balls will tell Labour's annual conference, according to extracts from his speech released in advance by his office.
"And that is why we must act now to kick-start the recovery, tackle the causes of rising borrowing and start to make our economy stronger for the future."
Labour say three billion pounds from the 4G sale would pay for 100,000 affordable homes and a two-year stamp holiday for homes costing up to 250,000 pounds.
(Editing by Patrick Graham)