Private companies are to be allowed to bid to run public services including health, education, social care and housing under reforms unveiled by Prime Minister David Cameron.
Mr Cameron said that his changes would end the state monopoly in "pretty much" every part of the public sector throughout the UK, except national security, frontline policing and the judiciary.
He said they marked the first step on the road to a "better, fairer country" in which citizens would enjoy "more freedom, more choice and more local control".
But unions responded with fury, accusing him of ushering in wholesale privatisation and putting the quality of services at risk on the day when private firm Southern Cross, which runs 750 care homes with 31,000 elderly residents, announced it was shutting down due to a financial crisis.
And Labour dismissed Mr Cameron's announcement as "spin", saying that the Open Public Services White Paper contained "few new ideas and even fewer new proposals".
The White Paper floats plans to enshrine in law "a general right to choose" in public services, with new powers for the ombudsman to act as an "enforcer of choice" on behalf of service users. In all but a few services, the state will be required to allow competition from the private and voluntary sectors unless it can justify why a monopoly is needed.
And consumer organisation Which? will extend its role as advocate for consumers in the private sector to cover the public sector.
"It shouldn't matter if providers are from the state, private, or voluntary sector - as long as they offer a great service," said Mr Cameron.
Speaking in east London as the reforms were unveiled to the House of Commons by Cabinet Office minister Oliver Letwin, the Prime Minister declared: "The old narrow, closed, state monopoly is dead."
Mr Letwin told MPs the reforms would be driven by the principles of choice, decentralisation, diversity, fair access and accountability.