For all the Tory talk of compassion, the truth is they are committed to cuts to vital public services which many of the most vulnerable members of society rely upon

Labour spokesman

He said: "We want to roll back the frontiers of the state and allow independent groups and charities the scope to play a bigger role in tackling social ills."

He also pledged a future Tory government to extending tax breaks for people donating unlisted shares to charity.

And he attacked the Labour government for its abolition of advanced corporation tax credits which he said would cost charities nearly �500m each year.

Oppose EU proposals

In addition to new tax breaks on shares not listed on the stock exchange, Mr Hague said his party would oppose EU proposals to remove the VAT exemption on donated goods.

But a Labour Party spokesman rounded on the Tories, saying that the government was leading the reform of charitable giving by introducing Gift Aid, which provides tax incentives for corporate giving to charities.

He said: "For all the Tory talk of compassion, the truth is they are committed to cuts to vital public services which many of the most vulnerable members of society rely upon."

In a speech to the charity aid foundation on Thursday, Mr Hague said over-reliance on state assistance diminished the importance of individual giving and the role of organised charities.

"A compassionate society springs not from the diktats of Whitehall, but from real day-to-day contact with, and concern for, your neighbour and local community," he said.

'Strengthen civil society'

The first step in tackling poverty was to strengthen civil society and in that, alongside the family and other local institutions, charities had a vital role to play, Mr Hague argued.

A Tory government would therefore give large charities the chance to run schools, housing estates and the opportunity to contribute to the renewal of inner cities.

He said: "It is time to denationalise compassion and create a genuine partnership between government and charities."

Mr Hague also announced that his party was setting up a new social policy think tank that would act as a resource for his party's frontbenchers.

The Renewing One Nation team will aim to boost Tory links to charities, voluntary and religious groups.

The think tank will be funded to the tune of �150,000 a year by Dixons' chairman Sir Stanley Kalms.

Mr Hague stressed that there was "no choice to make" between traditional Tory values and governing for all.

"They are two sides of the same coin," he said.