Bleak view of the gulf between people and government

Democracy faces meltdown in Britain as the public rejects an outdated political system which has centralised more authority than ever in a tiny ruling elite, the Power inquiry warns today.

In a bleak picture of the gulf between the government and the governed, it concludes that growing numbers of people feel their votes are wasted and that they have no influence over the decisions that shape their lives.

Setting out a 30-point plan to revitalise the electoral system and achieve a dramatic shift of power from Whitehall, it says that there is an "overwhelming desire for change among the British people".

The inquiry report, Power to the People, dismisses suggestions that the falling electoral turnout - nearly 40 per cent of adults failed to vote at last year's general election - is due to public apathy or a declining sense of duty.

It points to the mass support for causes such as the anti-war movement and the Countryside Alliance and to a recent survey that discovered that half of adults - 20 million people - had done voluntary work.

The report, the most extensive of its kind in Britain, concludes that a two-party political system moulded in the early 20th century was out of kilter with a "far more complex" country. The inquiry says that there is a "very widespread sense that citizens feel their views and interests are not taken sufficiently into account".

It delivers a damning verdict on the first-past-the-post voting system and calls for a "more responsive" electoral system such as that offered by the single transferable vote, in which electors place their candidates in order of preference.

Such a reform, in making every vote count, would help to create "more open, fluid and relevant parties" as opposed to parties that were increasingly seen as too similar.

"A system which reduced the security of safe seats and thus required all parties and candidates to campaign vigorously could prevent some of the [recent] surges of support for the British National Party."

The inquiry believes that the vote should be extended to 16-year-olds in an attempt to engage them in the democratic process.

It calls for more incentives to encourage small parties to stand, such as the scrapping of the election deposit, and for voters to be able to allocate £3 of public money to support the party of their choice on polling day.

The inquiry warns: "The executive in Britain is now more powerful than it probably has been since the time of Walpole."

It highlights the inability of Parliament to demand an inquiry into the Iraq war or to receive details from ministers of the cost of their proposals for national identity cards. The authority of MPs should be bolstered with select committees given more authority, Parliament given greater scope to initiate legislation and curbs placed on the power of party whips.

It envisages a reformed House of Lords, 70 per cent of whose members are elected for up to three terms and 30 per cent appointed by independent commissioners.

The report calls for a transfer of authority downwards from central government to Parliament and from Whitehall to town halls. Town halls should be given greater relevance and accountability by gaining the power to raise taxes locally.

But the inquiry also concludes that reorganising democratic systems is not enough and that voters must be allowed a greater sense that they can make a difference to their everyday lives.

To create a "culture of participation", it calls for all public bodies to have a statutory duty to involve the public.

Citizens should be able to initiate law through petitions, hold inquiries and force a parliamentary debate. Parallel processes could be set up for councils and local bodies. MPs should produce annual reports and hold annual general meetings. The inquiry says: "We believe that it is vital not just to reassert one's faith in democracy, but rethink it to meet new challenges."

The inquiry, funded by the Joseph Rowntree Trust, was set up in 2004 to explore ways of boosting political participation.

It conducted meetings around the country, conducted polling, took evidence from academics and politicians, and received more than 1,500 submissions from the public.