A study into the state of democracy in Britain over the last decade warns it is in "long-term terminal decline" as the power of corporations keeps growing, politicians become less representative of their constituencies and disillusioned citizens stop voting or even discussing current affairs.

The report by Democratic Audit shared exclusively with the Guardian notes there have been many positive advances over the last 10 years: stronger select committees of MPs holding ministers and civil servants to account; devolution of power to Northern Ireland, Scotland and Wales, and publication of much more information about politicians' expenses and party donors. But it found evidence of many other areas where Britain appeared to have moved further away from its two benchmarks of representative democracy: control over political decision-making, and how fairly the system reflects the population it represents – a principle most powerfully embedded in the concept of one person, one vote.

Among its concerns, identified from databases of official statistics and public surveys, were that Britain's constitutional arrangements are "increasingly unstable" owing to changes such as devolution; public faith in democratic institutions "decaying"; a widening gap in the participation rates of different social classes of voters; and an "unprecedented" growth in corporate power, which the study's authors warn "threatens to undermine some of the most basic principles of democratic decision-making".

In an interview with the Guardian, Stuart Wilks-Heeg, the report's lead author, warned that Britons could soon have to ask themselves "whether it's really representative democracy any more?"

UKs weakening democracy Photograph: Graphic

"The reality is that representative democracy, at the core, has to be about people voting, has to be about people engaging in political parties, has to be about people having contact with elected representatives, and having faith and trust in elected representatives, as well as those representatives demonstrating they can exercise political power effectively and make decisions that tend to be approved of," said Wilks-Heeg.

"All of that is pretty catastrophically in decline. How low would turnout have to be before we question whether it's really representative democracy at all?" The UK's democratic institutions were strong enough to keep operating with low public input, but the longer people avoided voting and remained disillusioned, the worse the problem would get, said Wilks-Heeg.

"Over time, disengagement skews the political process yet further towards those who are already more advantaged by virtue of their wealth, education or professional connections. And without mass political participation, the sense of disconnection between citizens and their representatives will inevitably grow."

Membership of political parties and election turnout has fallen significantly in the last decade, with only 1% of the electorate belonging to a party, and just over six out of 10 eligible voters going to the ballot box in the 2010 general election and barely one in three in European and local elections. But the depth of public disillusionment and the range of ways voters are turning away from politics revealed by the latest study could shock even those involved.

Sadiq Khan, shadow justice secretary and former chair of human rights group, Liberty, said: "What I find really troubling is there's no shortage of big issues which we must get to grips with – the economy, the future of our health, education and social care systems, our environment – many of which grab the attention of the public, but there's a disconnect when it comes to party politics."

For its fourth report in a series dating back to 1996, Democratic Audit examined dozens of data sets from Britain and other countries with democratic governments, legislation, public opinion surveys and research from other academics.

The report, funded by the Joseph Rowntree Charitable Trust, found 74 "areas of improvement", ranging from the increasing use of the 1998 Human Rights Act to growing membership of smaller parties such as the Scottish Nationalist party and the Greens, which gained its first MP, Caroline Lucas, in 2010.

However, there were 92 areas in which the authors had "continuing concerns", such as the uncertainty over England's constitutional settlement as powers were increasingly devolved to the other three parts of the UK, and increasing evidence of press harassment; and a further 62 "new or emerging concerns", including electoral fraud and declining newspaper sales and audiences for TV news.

Britain also ranked below average compared with other wealthy democracies in the OECD and the EU, and even worse when measured against Nordic countries for issues from party membership and turnout to corruption, press freedom, income inequality and trade union membership.

This was "further evidence of the areas in which [the UK] falls short, not of an abstract ideal of democracy, but of what has been demonstrated to be possible," adds the report.

The exercise was not intended as a "scorecard" since the issues covered ranged from lowering the age at which candidates can stand in elections to setting up a supreme court; but the combined result is "fine grained", says the report.

"The sheer volume of qualitative and quantitative evidence we have collated, not just for our current audit but also for the previous ones, enables us to make informed judgments," it adds.

Recent attempts to rejuvenate democracy had not had much success: last year only 42% voted in a rare referendum on changing the voting system for general elections, and in May [2012] eight out of nine cities rejected the chance to have directly elected mayors like London. Among the changes that could stem or reverse the democratic drift would be stronger powers for MPs to hold ministers to account, and a written constitution to ensure institutions such as the Electoral Commission were not vulnerable to being abolished by future governments, said Wilks-Heeg.

A proposal to reform the Lords by having mostly elected members was also welcome, but would only work as part of a wider vision, not the usually "piecemeal" approach, said Wilkes-Heeg.