Mr Clarke said he was not blaming Gordon Brown's leadership |
In an article for the Labour magazine Progress, he said the party had wasted much of this Parliament and needed to show "a lucid sense of direction".
He told the BBC he was not blaming Gordon Brown as problems began in 2004.
But he said the PM needed to set out his approach to "tough problems" like Britain's role in the EU.
Mr Clarke said that once close ally Tony Blair announced he would not contest another election in October 2004, questions about the party's leadership had dominated Labour.
'Inevitability of defeat'
He wrote that the party had wasted much of this Parliament and must show greater "clarity, decisiveness and a lucid sense of direction" and said the prime minister must do more than defend past achievements and launch more policy reviews.
And he said there was "absolutely no reason to surrender to the inevitability of defeat, as too many seem now to be doing".
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