Ieuan Wyn Jones says the devolved institutions should have more power
The MPs' expenses scandal has stripped Westminster of the "moral authority" to refuse a referendum on more assembly powers, said the Plaid Cymru leader.
Ieuan Wyn Jones told an audience in Caernarfon that the only way to restore people's faith in politics was to devolve more powers to Wales.
He said the "shenanigans at Westminster" made an "early, successful referendum" more likely.
His speech follows three weeks of damaging disclosures on MPs' expenses.
The Plaid leader said that none of the solutions put forward so far would restore trust.
He also attacked Conservative leader David Cameron's proposals as "pick and mix" and intended only to suit his party's "narrow political priorities".
Mr Cameron has said any Conservative who refuses to pay back "excessive" claims would be thrown out.
Conservative MPs will be required to publish details of future claims online and a panel to scrutinise claims will be set up.
But Mr Jones warned that recent events had seriously eroded the relationship between politics and the wider community, and that he had never experienced such a breakdown of trust and authority during his entire political career.
The only way to give political authority back to the people, said Mr Jones, was to transfer more powers to the devolved institutions.
He said the Welsh assembly had created a model of "open, participative governance" which contrasted with the closed, centralist tendency at Westminster.
"Most politicians and commentators are united in the belief that Westminster needs radical and widespread reform. If so, surely now is the time for more powers to be transferred," he said.
"Those who are opposed say that the assembly first needs to learn the ways of the "mother parliament" before having more powers.
"Well, no thank you very much. Their way is not our way.
"Our way in Wales has been creating participative, open governance fit for a 21st Century modern European nation.
The assembly is "open governance fit for the 21st Century," says Mr Jones
"We need to transfer more powers to Cardiff, Edinburgh and Belfast if we are really serious about giving political authority back to the people.
"The current political climate gives those of us who believe in real devolution, in taking more and more decisions closer to the people, a chance to raise our voices.
"In my view, the recent shenanigans at Westminster have made it much more likely that an early, successful referendum will be held, and when the assembly seeks a referendum under the 2006 Act, then in the current climate surely Westminster does not have the moral authority to oppose it."
Mr Jones also challenged Mr Cameron to give an assurance that if the Welsh assembly requested a referendum on full law-making powers, then a Conservative secretary of state for Wales would not veto it.
The Welsh secretary is entitled to veto a referendum request under the 2006 Government of Wales Act.
A Welsh Conservative party spokesman said: "When he visited north Wales this week, David Cameron made it clear devolution isn't just about transferring power from one parliament to another.
"It's about giving communities more power.
"The issue of whether or not there is a referendum on further assembly powers is being considered by the All Wales Convention which is due to publish its report at the end of the year."
Welsh Liberal Democrat leader Kirsty Williams said her party agreed with the call for more powers to be transferred to the assembly.
"In fact, it seems that the deputy first minister is reiterating what former Liberal Democrat leader Paddy Ashdown said on a visit to Wales three weeks ago," she said.
"Paddy Ashdown said that for people to reconnect to politics and the people who represent them, more power needs to be devolved to Scotland, Wales and Northern Ireland."
Labour's Wayne David MP, a Wales Office minister, said: "With less than a week before the European election on June 4th, people across Wales know that the real issues facing our country are how we can best fight the recession, regenerate the Welsh economy and be ready for the economic upturn when it comes.
"Meanwhile, Mr Ieuan Wyn Jones chooses to focus on talk and process rather than action. This will hold little interest for people who are battling to save their jobs and looking for real help to get through the current recession."