Jeremy Corbyn would renationalise public companies sold for knock-off prices by the Tories

'His opposition to austerity is actually mainstream economics'

Jeremy Corbyn outside King’s Cross station on Tuesday to announce his plans to renationalise the railways (Getty Images)

Public assets sold off by the Conservative government face being renationalised with "no compensation" by Jeremy Corbyn if they go for a knockdown price, the left-winger's campaign has revealed.

Royal Bank of Scotland is among the state-backed resources the MP would "reserve the right" to take back into public ownership if he leads the Labour party.

The process could happen "with either no compensation or with any undervaluation deducted from any compensation for renationalisation" if they are disposed of too cheaply over the next five years, according to the Observer.

It comes as a former Bank of England adviser was among more than 40 economists to publicly back the Islington North MP's policies in a significant boost to his Labour leadership campaign.

Danny Blanchflower, a former member of the monetary policy committee, is among the signatories to a letter in the Observer dismissing claims Mr Corbyn is "extreme", arguing instead that his opposition to austerity is "actually mainstream economics".

The letter said: "The accusation is widely made that Jeremy Corbyn and his supporters have moved to the extreme left on economic policy. But this is not supported by the candidate's statements or policies. His opposition to austerity is actually mainstream economics, even backed by the conservative IMF. He aims to boost growth and prosperity."

Mr Corbyn has also unveiled plans to give working class Labour members cash to help them become an MPs in an effort to stop the party and parliament being dominated by people from affluent backgrounds.

Labour now has more MPs who went to private school, some 12%, than those from manual working backgrounds, who account for just 7%, according to research highlighted by the leadership favourite.

He has pledged to set up a diversity fund to help party members who are shortlisted in one of the top 100 target seats at the next election while they are trying to win selection, which is estimated to cost around £4,500.

Mr Corbyn said: "If the Labour Party is to win back the five million predominantly working class voters lost since 1997, then we must reflect those we seek to represent; it is not enough to be for working people, we have to be of working people as well.

"Because if at the next election we as a party have hardly any candidates from the frontline of Tory cuts then it will be very hard to be heard by voters we need to win back.

"It is therefore only right that the party helps collectively to shoulder some of the financial burden of members on more modest incomes during the candidate selection process so that we remain the people's party."

Meanwhile, leadership rival Yvette Cooper will set out her plans to tackle climate change, warning it is the "biggest existential challenge threat to mankind".

She will outline an environmental blueprint that includes plans to ensure every new home is a zero carbon building.

At an event in Leicester, Ms Cooper will say: "Climate change is the biggest existential challenge threat to mankind. There are some who believe that the impact of climate climate change will be felt far off in the distant future, if at all, and as a result we can defer acting to stop it now.

"They're wrong. The consequences of the government's inaction are being felt here and now. They are a betrayal of future generations."

She will add: "David Cameron's hug-a-husky but scrap a windfarm hypocrisy has set us back years and puts us in danger.

"The UK's declining position in the global league tables for attractiveness for investment in green energy betrays our nation's tradition in pioneering technology that makes the world better.

"The Government is failing to show the leadership required and seems set on undermining the green economy."

PA