A credibility crisis is building in Britain's political institutions, says Lib Dem leader Sir Menzies Campbell.
Sir Menzies said the vote was a test of his party, not himself
Reform of the voting system and the House of Lords were "roadblocks" to getting people more involved in democracy, said Sir Menzies.
He was speaking at a conference about democracy in the wake of the local elections, when turnout was 36%.
Tory David Cameron told the event the prime minister should no longer be able to "ride roughshod" over Parliament.
The conference was organised by the Power Commission, which recently reported on how to get people more involved with politics.
Sir Menzies announced he was setting up a new working group to look at citizenship and better government.
There would also be online discussions of the Power Commission's findings.
The Lib Dem leader said Lords and voting reform had been urgent when Labour came to power in 1997.
"Failure to accord them the appropriate urgency once more will invite a crisis in the legitimacy and credibility of our institutions themselves," he said.
Sir Menzies said failure could not be tolerated.
"It is 174 years since the Great Reform Act of 1832," he said.
"The progress that has become the mark of our democratic society since that day has stalled. It must be reinvigorated."
Mr Cameron called for new curbs on the prime minister's power.
"In a number of important areas - going to war, agreeing international treaties - there is no formal mechanism for consulting Parliament, the nation's elected representatives," he said.
"In other areas like making senior appointments, reorganising government departments, the prime minister is able to exactly as he likes without consulting Parliament at all."
Pointing to the changes in John Prescott's position role in Friday's Cabinet reshuffle, he continued: "We learned yesterday that the prime minister was able to give someone a job without actually having a job or a department."
It was also ridiculous that the prime minister was the arbiter of the ministerial code of conduct, an arrangements which inspired little public confidence, he said.
Mr Cameron also renewed his calls for an end to "Punch and Judy" politics.
Too often voters saw MPs at their worst: scoring points, shouting and "demanding resignations at the drop of a hat".
"It means that when there is a real scandal, such as the one over prisoner releases in recent days, it becomes harder to tell it apart from the other more manufactured rows," he argued.