Ed Balls said he could start work with Vince Cable immediately to kick-start the economy with a capital spending programme.
Mr Balls insisted he wanted an outright win for Labour in 2015 but said that in the meantime his party should be working with the Liberal Democrats.
Speaking to Andrew Marr on the BBC, Mr Balls said:
I wish George Osborne would see Vince Cable as a man to do business with and listen to, rather than telling the newspapers he is putting his allies in (to the Business department) to try and surround him and hold him back.
Vince should be listened to on banking reform and on the economy. I could work with Vince. I would like the Liberal Democrats to say right now that this coalition has failed and we're going to change course.
More top news
Donald Trump has reconfirmed his nation's commitment to securing peace in Afghanistan
Yvette Cooper has called on Twitter to 'get its act together', urging a crack down on hate speech.
An earthquake has hit the Italian resort island of Ischia, killing at least one person and trapping around six others.