The prime minister and the chancellor have realised that "you can't run Britain from Whitehall", according to Ken Livingstone.

In an interview with ePolitix.com, the mayor of London said around a dozen English regions should be created to "dramatically reduce the power and reach of central government".

Mayoral offices could then be used as a training ground for national politics, as in Germany and the US, he said.

"I watched Tony Blair’s government when they were all learning how to run things, whereas I learnt that on Camden council in my twenties.

"I think if we establish the position that primarily our prime ministers were drawn from people who’ve got a successful record of running greater Yorkshire or the North West or the East Midlands or London, or Scotland and Wales, and demonstrated you can run a bureaucracy, you can deliver, that would be a much better way of selecting our national leaders than doing it on the basis of whether they can score points effectively in a debate in parliament."

Regional leaders could be responsible for running police, fire, transport, regeneration, skills training, and further and higher education, he said.

The Greater London Authority Bill, which will give the mayor strategic housing and planning powers across the whole of London, had its second reading in the Commons on Tuesday.

Livingstone said fears of planning battles between the mayor and the borough councils had been "talked up quite ridiculously".

And he said he expected 99 per cent of planning applications to continue to be decided by borough councils, with the mayor intervening in applications of London-wide importance and to "stop councils obstructing plans for new affordable homes".

He said the legislation's weakness was a failure to create a single waste authority, adding that London's recycling rate of 20 per cent of household waste was "one of the most shameful stains on British politics".

"I can't believe a government that has actually led the world in terms of the case for Kyoto and carbon reductions is taking such a short-sighted approach in its capital city," he said.

The 2012 Olympics is likely to become the defining issue of Livingstone's third term in office - should he win re-election in 2008 - and he said he was confident he had the Treasury's support despite rising costs.

"The simple thing to bear in mind is that a successful Olympic games will be a huge boost for Britain, and you could very well find it will come shortly before a general election where Gordon Brown is seeking his second full term as prime minister," the mayor said.

Livingstone, who rejoined Labour in 2004, said he believed the party would be renewed by Tony Blair's likely successor, the chancellor.

"I do expect that when Gordon takes over there'll be a quite distinct sense of renewal," he said.

He believes Brown has worked out "a package of quite striking initiatives that will clearly define a new administration and a new relationship with the British people".

And he added that Labour's majority could increase at the next election if the government withdrew troops from Iraq and set "a more radical domestic agenda".