Labour leader Ed Miliband is to call for G4S to be banned from further Government contracts until a review of the Olympic security fiasco.
Mr Miliband will use a speech this morning to demand a block on any new public money for the firm after the failure, which he claims "beggared belief".
He will also use the affair as evidence that the coalition should halt moves to massively increase private sector involvement in policing, warning it will undermine forces' resilience.
The under-fire security firm is already involved in £600m worth of private work for the Home Office alone and had been hoping to further increase its share of the market.
But Mr Miliband, addressing a gathering of his party's candidates to be the first elected police and crime commissioners (PCCs) in England and Wales, will say that ambition must be put on hold.
"Before they are awarded any new policing contracts, we need a review of G4S's ability to deliver," he will tell them.
The Ministry of Defence has already had to supply 3,500 extra troops - taking the total to 11,000 - to fill a shortfall after the company admitted it had failed to recruit enough guards.
Another 2,000 are believed to be on standby and a decision about whether to put them on "notice to move" is expected to be taken today, according to a Home Office source.
G4S boss Nick Buckles insists the company will still claim its £57m management charge but sports minister Hugh Robertson has vowed to that the Government will activate "all penalty clauses" in the contract.
In his speech, Mr Miliband will claim that the problems should force the Government to rethink its position on the role of the private sector in policing.
"The Tory-led government's cuts to policing are resulting in forces coming under pressure to outsource on a scale and at a speed never before seen," he will say.
"Not only that, we are not getting the reassurance we need that core policing functions will not be privatised - there is a complete lack of oversight from the Home Office."
He will add: "Policing is too important to be left in the hands of multi-national companies unaccountable to taxpayers."
The Labour leader warns that the Government has to be "much clearer about where the lines are drawn" before the election of the first wave of PCCs in November.
He will also suggest that private security staff undertaking any policing should be accountable to the Independent Police Complaints Commission in the same way as sworn officers.
Labour opposed the introduction of PCCs and is critical of the cost of elections but is fielding a slate of candidates, including high-profile political figures such as Lord Prescott.
Mr Miliband will say that PCCS should be able to use public-private partnerships if they lead to clear savings.
The main parties are going head-to-head on the elected commissioner issue with Home Secretary Theresa May, who is due to address the Tory candidates.
Last week, a police authority suspended its part in a privatisation scheme after problems with the G4S contract emerged.
Surrey Police Authority said it was "minded to withdraw" from the business partnering programme, a joint initiative with its West Midlands colleagues and the Home Office.
G4S was part of a shortlist of six groups bidding to take over "middle and back office functions".
