Sweeping reforms to parliamentary constituencies will be introduced alongside moves to change the voting system, Deputy Prime Minister Nick Clegg announced today.
The Government's proposed boundary review, equalising the size of all but two constituencies, would be in place in time for its planned 2015 general election, he said.
Mr Clegg also confirmed that a referendum on replacing first-past-the-post Westminster elections with the Alternative Vote (AV) will be held on May 5 next year.
He said that legislation on the boundary review would pave the way for the process to be completed by 2013, in time for the selection of candidates ahead of a poll on May 7 2015.
"That means that, in the event of a vote in favour of AV, the 2015 general election will be held on the new system and according to new boundaries," Mr Clegg told MPs.
The boundary review would result in the number of MPs being cut from 650 to 600. Mr Clegg said that would save £12 million a year in pay, pensions and allowances.
The Boundary Commission will be required to bring all but two constituencies within 5% of a target number of registered electors.
The two exceptions were the Western Isles and Orkney and Shetland because they are "uniquely placed, given their locations".
Mr Clegg also overhauled the Government's plans to enshrine fixed-term parliaments in law, renouncing a previous plan requiring 55% of MPs to vote for a dissolution.
Under a Bill to be introduced within the next few weeks, Parliament would be dissolved and an election held if no Government could be formed within 14 days of a simple majority vote of no confidence.
There would also be the power for MPs to call an "early and immediate" dissolution, but a majority of two-thirds would be needed in those circumstances.
In a statement to the Commons, Mr Clegg said: "Together these proposals help correct the deep unfairness in the way we hold elections in this country.
"Under the current set-up, votes count more in some parts of the country than others, and millions feel that their votes don't count at all.
"Elections are won and lost in a small minority of seats.
"We have a fractured democracy, where some people's votes count and other people's votes don't count, where some people are listened to, and others ignored."
Shadow justice secretary Jack Straw said Labour backed a referendum on AV, which it promised in its own manifesto.
But he said the party would oppose the legislation because of the "outrageously partisan" boundary changes designed to "gerrymander" constituencies.
Six of the 10 largest constituencies and only three of the 10 smallest were Labour-held, he pointed out.
He also described the decision to move away from the 55% confidence threshold as "the first major U-turn of this Government - and in less than two months".
"Why didn't you think before about the impossibility of a government hanging on after it had lost a vote of no confidence by a simple majority? It would have saved you a great deal of embarrassment," he told Mr Clegg.
Mr Clegg said the fixed term parliaments are a "hugely significant constitutional innovation" and would make it impossible for a Government to dissolve Parliament for its own purposes.
"It simply is not right that general elections can be called according to a prime minister's whims," he said.
"So this prime minister will be the first prime minister to give up that right."
He said that the AV referendum question would be "simple - asking people whether they want to adopt the alternative vote, yes or no". The precise wording will be tested by elections watchdog the Electoral Commission.
He acknowledged MPs' "concerns" about holding the referendum on May 5 but said it would save £17 million because it is the same day as other elections.
"I understand that this announcement will raise questions on all sides of the House, these are profound changes," he said.
"But let me just say this - yes, there are technical issues that will need to be scrutinised and approached with care as these Bills pass through Parliament.
"But ensuring that elections are as fair and democratic as possible is a matter of principle above all else.
"These are big, fundamental reforms we are proposing, but we are all duty bound to respond to public demand for political reform.
"That is how we restore people's faith in their politics once again."
Prime Minister David Cameron's official spokesman said the two-thirds threshold for dissolution of Parliament would prevent a government from using its majority in the Commons to secure a general election at the time of its choosing. This was essential to ensure that fixed-term parliaments become the norm, he said.
Under the new rules, a vote of no confidence would not necessarily trigger a change in government, as the sitting prime minister could seek to form a new administration by winning a second confidence vote within 14 days.
Opposition leaders could equally attempt to take power by securing the backing of a simple majority of the House on a confidence motion within the two-week period. It has not yet been made clear who would have the first right to seek to form an administration.
"This sets out a very clear procedure: you have 14 days for someone to try to form a government and if they can't, then Parliament is dissolved," said the spokesman.
"There is nothing in law that currently says that following a vote of no confidence, the prime minister of the day has to go to the Palace. That is the convention, but it is not the law."
Three bills will be introduced to usher the coalition's programme of constitutional reform, said the spokesman.
The first, to be tabled before the summer, will include legislation to pave the way for the referendum on AV as well as boundary changes to equalise the size of constituencies. The spokesman acknowledged that this bill was the most urgent, as the Government aims to introduce the boundary changes and hold the referendum before the 2015 poll.
The second, also likely to come before Parliament ahead of the recess, will deal with the new provisions on no confidence motions and votes to dissolve Parliament.
Later in the Parliament, MPs will be asked to vote on a third bill covering issues such as House of Lords reform.
Mr Cameron has made clear that he opposes a change to AV voting for Westminster elections, but his spokesman said today that neither the Prime Minister nor his Cabinet ministers are expected to throw themselves fully into the referendum campaign.
"The Prime Minister and other Cabinet ministers are going to express their views in the context of the campaign, but you wouldn't expect them to devote 100% of their time to campaigning in the referendum," he said.Reuse content