Political parties are so small they are "nearing critical condition" in many constituencies, a survey suggests.
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The Unlock Democracy group found 40% of Liberal Democrat associations had fewer than 100 members, followed by 20% of Tory and 3% of Labour associations.
In seats where the Conservatives had little chance of winning, they had "literally died off", the report said.
Unlock Democracy, which surveyed 286 local associations, said parties focused too much on national campaigns.
Conservative associations in northern England typically had fewer than 50 members per constituency, compared with more than 500 in "solid" seats.
Labour's membership was more evenly distributed, as was that of the Lib Dems.
Unlock Democracy estimates that 67% of the UK population had no face-to-face contact with any of the three largest parties at the last general election.
The Conservatives nationally spent £4.5m on direct mailing, which went on targeting "just 800,000 individuals".
The other parties focused on specific seats too, but not to the same extent, the report - Local Politics: A Case for Treatment - said.
It added: "We are caught in a vicious circle: the more political parties centralise their campaign operations, the more local activism dwindles, meaning that parties have to centralise and target resources even more.
"Elections are being determined by an ever-decreasing group of people."
In Labour-Conservative marginal seats, the local Conservative party had five times the spending power of their rivals on average.
According to Unlock Democracy, US research suggests face-to-face contact with voters can raise election turnout by 9.8%, compared with 0.6% for direct mail.
The group's director, Peter Facey, said: "In Britain, our politics can be summed up as 'national wealth and local squalor'.
"At a national level, political parties set new records in raising and spending so much cash.
"Yet this money is spent on targeting a tiny minority of swing voters and things like billboard advertising that do nothing to engage voters."
Local party politics had "dwindled away to an unprecedented degree", he added, saying the public needed "a basic level of information during elections".
To create more voter engagement, Unlock Democracy is calling for tax relief for donations of up to £200 made to local associations, while caps should be placed on larger gifts, so that parties must rely less on rich donors.
The group also wants political activity to be officially recognised as "voluntary work".
Its report said: "Political parties may be unpopular but there is simply no better alternative model for organising democracy.
"They are still the only effective mechanism by which normal people can have any personal contact with the body politic, but as this research shows they are now nearing critical condition in terms of their ability to perform the set of tasks we need them to perform."
Unlock Democracy is a campaign run jointly by Charter 88 and the New Politics Network.