Ken Livingstone has criticised the government's move to give the private sector a greater role in public services and predicted that Labour MPs and trade unions will be more assertive during Labour's second term.

In an exclusive interview with ePolitix.com, Livingstone agreed with the government's position that the delivery of public services would be crucial over the next parliament.

"If Labour wants a third term it's going to have to make sure that in this next four years it does deliver," he warned.

The London mayor rejected the government's focus on private sector solutions to improve services.

"I think so much of this is the same nonsense we've had with the underground. The same little group of people in the Treasury, none of whom have ever run anything in their lives, then pontificate about all this but the truth is public services in this country have had a battering for 25 years and you've got to actually pay the workforce decently, you've got to have long term plans for improving investment and simply assuming you can bring in a private firm and they will turn it all round, we've seen that doesn't happen. Many of the privatisations have been a disaster as with Railtrack," he argued.

Livingstone called on the government to hand over responsibility for the London Underground to transport commissioner Bob Kiley, but acknowledged that was not a realistic possibility. He added that there was still a fifty-fifty chance that Kiley would take the government to court over its plans for the Tube.

Turning to the problems faced by the rail industry, Livingstone said the failure to put the re-nationalisation of Railtrack on the political agenda indicated that "much of the confidence has gone out of radical politics in this country."

"I do think that railways should be nationalised, exactly as we nationalised them before. Simply take it over and transfer the existing shares into non-redeemable bonds," said the mayor.

On the question of tax, Livingstone set out his belief that Londoners would be prepared to pay more tax if they saw improved public services as a result.

"I raised the council tax and there was a big furore with the Tory Greater London Authority assembly members. They made it sound like it was the end of civilisation as we know it but I didn't get a single letter of complaint from the public about that increase.

"I think Londoners feel that if they can see more police on the streets they are prepared to pay for it. The same is true if they see the buses running and the tubes running on time, they are prepared to pay for it," he said.

Livingstone also predicted that over the next four years Labour MPs and the trade unions would be "much more assertive" than they were during the previous parliament. The government should also join the European single currency straight away in order to protect jobs in London, he said.

Asked about his chances of being allowed to re-join the Labour Party, he said: "I think there is a real possibility of that, but it's not something I'm pushing about because it's a matter for the Labour Party to decide what it wants to do.

"I will be standing again in three years time as Mayor of London, because it is up to Londoners to decide whether they want me to carry on. It would be very nice to stand as the Labour candidate, but I'm going to be a candidate one way or the other."