Public sector workers could band together as co-operatives to run services "pretty much everywhere", the government has said.
Cabinet Office minister Francis Maude said pilot projects in areas such as childcare and social services had shown "huge" benefits, including lower costs.
It would make work "more fulfilling" if staff ran things together, he said.
But he added there would be "exceptions" where such schemes could never work, such as army regiments.
The government announced 12 pilot "mutual" programmes in August, with staff being mentored by experts including those from John Lewis, which is run along similar lines.
Under the pilot schemes staff are still paid by the state, receiving the same wage as before.
But Mr Maude said: "They feel so much more involved. Their jobs become so much more rewarding and it's delivering better value for the taxpayer."
The scheme could not extend to the army for security reasons, but other organisations, such as parts of the Inland Revenue, could be mutualised, he added.
Mr Maude said: "I don't think we should be restrictive in this. We need to use common sense, obviously, but there are huge benefits here."
He added: "You encourage and support a group of public sector workers to come together and form themselves into a mutual, a co-operative and they themselves take responsibility for delivering the service.
"They get paid by the state on a proper contract. Our presumption is it can work pretty much everywhere, but obviously there are going to be exceptions."
There was a "huge, pent-up frustration among dedicated public sector workers, who can see how things could be done better and are frustrated at not being able to do it," Mr Maude said.
Staff would have to come up with plans to provide "significantly cheaper" services than at present if they wanted to form co-ops, he added.
Mr Maude added: "It isn't straightforward, because we live in a complicated world. I want this to work in a practical way, which is why we are proceeding cautiously at this stage."