The independent Power commission calls for sweeping changes to prevent a dangerous gulf between politicians and the people becoming even wider. Its ideas include allowing the public to initiate legislation and a shift of power back from the Government to Parliament, following criticism that Tony Blair has neutered it.
The report will make uncomfortable reading for the Prime Minister, whose critics accuse him of eroding trust in politicians by going to war in Iraq on a false prospectus. But it could provide some of the key planks of a drive to re-engage people in politics already planned by Gordon Brown, his most likely successor.
The commission, chaired by the QC and Labour peer Helena Kennedy, calls for an end to the first-past-the post voting system - the goal of The Independent's Campaign for Democracy launched last May after Labour won a majority of 67 with only 35 per cent of the votes cast and the support of just 22 per cent of the electorate. The campaign has won the support of almost 40,000 people.
Power to the People, the commission's 311-page report, demands a new electoral system "to ensure that all votes count by having some influence on the final outcome of an election." Although it does not propose a specific method, it suggests its goals could be met by the single transferable vote system in which voters mark candidates in order of preference.
However, the inquiry concludes that electoral reform is only "one part of a wider 'jigsaw' of change required to re-engage the British people with their political system".
Other proposals include lowering the voting age to 16; a £10,000 limit on individual donations to parties; decentralising power from central to local government; curbs on the powers of party whips; more powers for select committees to hold ministers to account and tighter rules on media ownership.
It bluntly warns politicians they must learn from the success of single-issue pressure groups which shows that people have disengaged from parties rather than political issues.
Baroness Kennedy of the Shaws said: "Politics and government are increasingly in the hands of privileged elites as if democracy has run out of steam. Too often citizens are being evicted from decision-making - rarely asked to get involved and rarely listened to. As a result, they see no point in voting, joining a party or engaging with formal politics.
"Parliament has had many of its teeth removed and government is conducted from Downing Street."
Mr Brown, who will speak at the report's launch today and at a follow-up London conference on 25 March, believes it is a "vital contribution" to the debate on how to empower the British people and intends to drive forward the agenda within government in the run-up to the next election.
The Chancellor believes problems such as low voter turnout, youth disengagement, falling party membership and the long-term decline of trust in politicians owe more to the political system than civic culture.
Mr Brown wants Labour's reforms to be based on devolving power from the centre - greater local autonomy over spending, granting people more power over local services and encouraging new forms of involvement such as neighbourhood agreements on service delivery.
He believes that constitutional reform must be a central issue for Labour's manifesto - including Lords reform, restricting the power of the executive, and doing more to promote trust in politics and the public realm.
On the eve of the report, the Government moved to head off one of its 30 recommendations - that 70 per cent of the members of the House of Lords should be elected. Lord Falconer of Thoroton, the Lord Chancellor, announced that talks would be held with other parties in the hope of reaching a consensus on the powers and composition of the second chamber. "Lords reform is unfinished business," he said. The move is a U-turn for Mr Blair, who has previously opposed a "hybrid" second chamber which is partly elected and partly appointed.Reuse content