“The PM is fighting for the millions of people in poverty who are held back by a system that doesn’t work for them,” he added.
Nandy’s comments come after a difficult few days for the prime minister which has seen around half a dozen Labour MPs and the Scottish Labour leader Anas Sarwar call for his resignation.
Sir Keir Starmer is also facing questions over his appointment of Peter Mandelson as the UK’s ambassador in the US, despite his known links to convicted sex offender Jeffrey Epstein.
A show of cabinet support on Monday meant Sir Keir survived the challenge from Sarwar, however he remains in a fragile position and senior ministers appear to be feeling more freedom to speak and act independently.
On Tuesday, Health Secretary Wes Streeting, circumnavigated an ongoing government process to publish communications related to the appointment of Lord Mandelson, by unilaterally releasing his own messages with the former Labour peer.
Now Nandy has given an interview to the Guardian which includes criticism of the government’s record.
Speaking to the newspaper, she said: “At times in our history in the Labour movement we’ve understood that our job is not just about redistributing wealth, it’s about who holds power. I think we’ve forgotten it.
“We’ve not done enough, and this has got to be the moment of reckoning where we say not just what are we here for, but who are we here for?”
She said MPs wanted the government to be “bigger and bolder” and that ministers needed to “wear our colours on our sleeves again”.
She also said the “culture” of the Labour Party had to change.
“We’ve got to be more open and porous and respectful of different points of view.”
Asked if her interview was the start of a potential leadership bid, the Wigan MP, who lost out to Sir Keir in the 2020 Labour contest, replied “God no.”
She added: “I think there are things the country needs to hear from us; they need to understand that we see and we acknowledge our mistakes.”
Despite the difficult week, Sir Keir sought to strike a defiant tone, telling reporters on Tuesday that he would “never walk away from the country that I love”.
He said he was fighting for the “millions of people held back because of a system that doesn’t work for them”, adding: “I will never give up on that fight.”
Conservative leader Kemi Badenoch has said the Labour Party had “lost confidence in Keir Starmer” and that it was “a matter of when, not if” he had to resign.
Maryam Eslamdoust, head of the Labour-affiliated Transport Salaried Staffs’ Association trade union, has said she wanted former deputy prime minister Angela Rayner to replace Sir Keir.
Speaking to the Guardian, she said, external Sir Keir should step down if Labour lose the Gorton and Denton by-election and that Rayner was a “credible figure” to take over.
A spokesperson for Rayner said: “There is no context and no vacancy. Angela has been clear Labour must come together, avoid distraction and work as a team to deliver for the public.”