John Button was leader of the Australian Senate for 10 years, from 1983 to 1993. He was a young activist, a middle-aged activist and is now, at 72, a semi-retired activist. Two years ago, at a meeting of his local Labor Party branch, he suddenly realised that the activism that had sustained his view of civic life was fragile.

“That branch had a long history. It used to meet in the town hall and if there weren’t 40 or 50 people present it was a bad night.” These days it struggles to get eight people together regularly. At the meeting he attended, one woman said she’d felt depressed beforehand but felt worse afterwards.

Two long-standing members said that was probably the last year they would take out a membership ticket. Button describes the feeling afterwards: “We shuffled out on to the footpath like people who’d been to a doctor and received bad news,” he says. “We’d seen the x-rays.”

In 2002, Button wrote in the Australian Quarterly Essay that Australia’s parliamentary system, with its two main parties, the Liberals and Labor, “has survived for one century and may, or may not, survive the next in its present form”.

Australia votes in a general election next month. It is one of the few nations where voting is compulsory, so there will be a high turnout. But there is no law that people should join political parties and thus Australia’s party life, which has been as lively as anywhere in the rich democratic world, is atrophying just as rapidly.

From London to Ottawa, Washington to Helsinki, Canberra to Berlin, political elites are looking on as the political parties, which sustained them for generations, crumble away. Slowly and inexorably over the second half of the 20th century, parties have been hollowed out by social change, consumerism and media power.

As world politics stumbles into further turbulence, these stealthy changes are having a dramatic impact on the nature and the consequences of political competition.

Throughout the world, wealth, leisure and the media seem to be conspiring against political involvement. Political drama has been high this year: Spain’s centre-right government was ousted by voters after terrorist bombs in Madrid just before the poll; the Greek socialist party Pasok lost power to Kostas Karamanlis’s New Democracy party; and Canada’s Paul Martin, seen as a shoo-in for prime minister at the beginning of the year, scraped through in June to form a minority Liberal government.

Yet to come is the US presidential election in November, which is likely to be the political-media event of the new century. In the US especially, the links between global events and national election campaigning have never been clearer, with the political fallout from the invasion of Iraq rippling across the world.

Like the elections earlier this year, the upcoming polls in Australia, the US and Britain (expected next year) will increasingly be media events rather than party-political.

Staged for the media, with leading politicians made household names and faces by television, newspaper and radio coverage, and with the more “boring” themes largely unreported, these are political shows rather than policy showcases.

Behind them is the untold story of the struggle, so far a losing one, to convince voters that party politics is worth the effort and is needed to stem the steady decline in the size, power and vitality of political parties themselves.

The European parliamentary elections in June illustrated the critical state of popular politics in Britain, the world’s oldest parliamentary democracy. For those (few) paying attention, it became increasingly obvious that Labour and Conservatives were struggling to find enough activists to maintain a campaign.

Soon after, new figures showed that membership of the Labour Party had slumped again, shedding 25,000 in six months.

After their election victory in 1997, new Labour promised a renewal of politics; not least in Scotland, where parliament has been re-established after three centuries of abrogation.

Tony Blair’s Labour has created a new political class, but no new surge of popular engagement in politics. Gerry Hassan, who edited The Scottish Labour Party: History, Institutions and Ideas, says “the pulse of the party in Labour’s Scottish heartlands is beating ever fainter”.

Hassan tells the story of the recent selection contests that Labour ran to choose their candidates for the next general election. “These were big, important battles,” he says, “but the turnout of members to vote was derisory.”

And he says this apathy is not limited to Labour. The Scottish National Party, which peaked in the late 1960s with more than 100,000 members is now down to less than one-tenth of that. “Their membership is little more than a folk-club gathering, but as a party they still speak the language of ‘movements’.”

Scotland now has proportional representation (for Scottish, not for Westminster, elections). Having parties with very low memberships and even smaller numbers of activists means it is very easy for new parties to break through. “I think we’ll see more and more ‘ugly parties’, running on single issues and organised around one personality or funder,” says Hassan.

One such single-issue party, whose appearance before the European elections all but monopolised media coverage of that poll, is the United Kingdom Independence Party. It seemed to be a sign of a revival of the health of party politics, suddenly emerging to express the views of a substantial proportion of Britons who never, never, never shall be Europeans. But that health is relative.

A large part of its high profile was due to the two screen stars who launched it - actress Joan Collins and TV chat-show host and former Labour MP Robert Kilroy-Silk. And though it said it raised £1.25m-worth of donations (or donations in kind) in the run-up to the elections, more than half of that - £715,000 - was donated by millionaire Paul Sykes, in the form of advertising billboards paid for by his company.

Europe’s political parties differ widely but they all suffer from a lack of members. British, German and Swedish parties of the left and right have been established for more than a century and are losing members; Italian parties have been dramatically realigned in the past decade and are losing (or have never gained) a mass membership.

Most of the main parties are either new creations - such as Silvio Berlusconi’s Forza Italia, the major element in the governing coalition of the right - or renamed, such as the Democrats of the Left (former communists) or the National Alliance (former fascists). None of them has been able to retain the extraordinary strength that political parties enjoyed from the 1950s to the 1980s.

In the 10 “new” European countries to the east, the European parliamentary elections were meant to be a first flexing of the democratic muscles. Turnout was almost universally low. In Poland, just 20 per cent voted, in Slovakia 17 per cent. Former eastern bloc countries do not have traditions of plural, liberal-party democracy, so they are starting from a different base.

It also seems that countries that have fought for democracy are having difficulty establishing political parties with which people want to be involved. A poll in Russia this year found that just 1 per cent of the population trusted political parties, and even the Communist Party - which had been the only mass party in post-communist Russia, as it had been the only permitted party in the Soviet Union - is haemorrhaging members as it splits, wanes in power and sees its favourite themes stolen by the Kremlin.

In Berlin, Germany’s chancellor Gerhard Schroder resigned from the presidency of his Social Democratic Party in an attempt to pacify its internal conflicts and manage the process of institutional reform. Schroder’s chancellorship has been one of the most difficult in post-war German history - largely because he has had to confront the unsustainability of the public spending commitments that his predecessors had made. His reforms are against the spirit of much of his mass party, and have helped to slash party members from 775,000 in 1998 to 660,000 in 2003.

The mainstream right has fared little better, while extreme groups are picking up support. This week voters in regional elections in the formerly communist East Germany gave the far-right National Democratic Party its best result in years, winning 9.4 per cent of the vote in the state of Saxony, almost eclipsing Schroder’s SDP, which polled 9.8 per cent - its lowest result in the party’s 140-year history.

Across the Atlantic, Canadian politicians are facing a wall of indifference. “Why should voters care?” became a persistent theme of media coverage during the election this summer. Disengagement among young Canadians was the biggest worry: only 22 per cent of 18- to 20-year-olds had voted in the previous election in 2000. Reviving the political system became a campaign theme with the “democratic deficit” a common phrase in speeches and interviews.

But in an opinion poll for CBC, the Canadian national broadcaster, 56 per cent said none of the political parties really addressed their problems. The June election had the lowest turnout since 1867, yet Canada is a rare example of a democratic nation where party membership is rising, especially for the Liberal Party, where numbers surged around the the leadership contest won by Paul Martin last year.

John Duffy, a Liberal Party strategist and author of Fights of our Lives: Elections, Leadership and the Making of Canada, has been a political activist for 25 years. He says the same thing happened in Britain’s Labour Party after Blair won the leadership in 1994 - but he expects Canada will also have a subsequent fall to new lows.

“I think their decline is fairly predictable. Parties’ role as local intermediaries between candidates and voters has gone. In an age of mass media and cheap travel, federal candidates can do it all themselves. You can almost think of parties as being like the middle management of the political system and, as in so many organisations in recent years, that middle layer has been hollowed out.

Somebody who has a beef with something has two options: they can either try to highlight that issue through the party system with all the time and effort that requires. Or they can be an activist, chain themselves to some railings and make the news the next morning.”

In London last week, Duffy’s comment was made flesh. Protesters against legislation to ban hunting with dogs made it on to the floor of the House of Commons’ debating chamber - a hall whose proceedings through the centuries, unbroken by war or revolution, have made it the world’s touchstone for resolving national differences by the clash and compromise of party government. Yet for 20 minutes, the spectacle of activists who knew they would become international news trumped all debate.

For more than a century, party organisations have been mobilising people to change policies, overturn injustices, represent ideologies. But they are now ghosts of their former selves. Between the 1950s and the turn of the century membership of political parties dropped in almost all of the “old” democracies around the world. In New Zealand membership collapsed from 23.8 per cent of the electorate to just 2.1 per cent. In Denmark it dropped from 15.7 per cent to 3.1 per cent and in the UK it fell from 10 per cent to 1.9 per cent.

In the US, paid-up party membership has not existed in the same way as in other countries, but even so the traditional party organisations are struggling to maintain their dynamism, popularity and relevance. Voter turnout has long been seen to be critically low. Even in November, in the most fiercely contested presidential election for decades, only 50 per cent of voters are expected to turn out. The active life that Democratic and Republican parties had on the ground, though far from dead, is being reduced by the same pressures as elsewhere.

Yet as membership decays, spending rises (the two main parties in the 2004 US election cycle have already spent more than $1bn). The details of the spending, however, shows a connection to the fall in party members.

Party income in the UK rose 42 per cent between the 1960s and 1990s, while the number of regional and local staff employed by the parties dropped 56 per cent. Parties spend much more on national advertising and media manipulation, but far less on local campaigns.

The sources of party finances have also changed. In many countries, for many years, funding has come from membership fees. But as members evaporate, so has this source of income. The result is that parties on both left and right are increasingly dependent on larger donations either from wealthy individuals or from corporations.

This often means that the burgeoning demands for campaign spending, particularly on advertising, must be offset against the risk of inquiries into funding by an increasingly sceptical media and distanced electorate.

High-profile donors with questionable links to government policy decisions do not make for wider public trust. In the US, vice-president Dick Cheney has been under fire about contracts awarded to his former company, Halliburton, in rebuilding Iraq.

And in Britain, Blair was called to account for a £1m donation to the Labour Party before the 1997 election by Bernie Ecclestone, the head of Formula One, which was followed by a decision to exempt the events from a ban on tobacco sponsorship. (Labour later returned the donation.)

The McCain-Feingold reforms in the US in 2002 outlawed parties taking soft money - unrestricted donations by individuals and corporations to political parties. These laws created a rush to independent political organisations called 527s, the number taken from the section of the tax code that created them, which are rapidly becoming the vehicle of choice for big donors.

Others have turned to the power of the world wide web. During Howard Dean’s push for the Democrat presidential nomination in 2003, he succeeded in using the internet as a fundraising tool, gathering thousands of small donations which propelled him to the top of the fundraising league from relative obscurity. His tactics have since been emulated by the campaign to get John Kerry into the White House.

As well as changes to financing, the party strength of the 1950s has been affected by the rise of television, which has undermined the tradition of face-to-face interaction between politicians and voters and live “platform” speaking.

These still matter, but they are not the way in which dominant images are formed - or if they are, it is because they have been captured and reproduced on the box. Not only does television reach more people than any other form of political communication, but it has shaped the messages that people are seeking.

By the turn of the century, time-pressed voters were much more likely to form an impression of a party through a 15-second television appearance of one of its senior figures than from any local member of a political party knocking on the door.

Internet communication is adding to the media mix. Websites and online forums spread unedited, and unchecked, information. Gossip, denunciation and scandal are available in a parallel, teeming universe that can sway party choices, or sway people away from parties.

Electronic networks provide an alternative method of mobilisation and accurate targeting - as both Dean’s and Kerry’s web-based fundraising networks have shown. These also allow online discussion and debating forums that do not depend on the local party secretary booking a hall.

During the 1998 impeachment proceedings against Bill Clinton in the US a West Coast couple who had just sold their software company sent out an e-mail petition to a hundred or so friends calling for Congress to simply censure Clinton and “move on”.

Within a week, the petition had 100,000 signatures. Within a month it had broken through 300,000. Now MoveOn.org is a powerful force in US politics, attracting a new generation of philanthropists and political funders.

These personally based networks of activism are looking for new routes to influence large-scale political decision-making; but rather than working through the established channels and hierarchies of the party machine, they increasingly seek to combine new methods in looser, more creative ways.

The politically interested can now access information and issues through a previously unimaginable range of channels, and come up with their own set of values and interests - they don’t need to rely on material sifted by a party machine.

Political parties are also competing with the rise of consumerism and individualism. As a senior British cabinet minister remarked privately recently: “The British working class has a thin experience of civic engagement; it has a thick experience of consumption.”

Political parties find it hard to make their voice heard among the clamour and professionalism of campaigns designed to make people go shopping or be entertained. Douglas Alexander, MP for Paisley South and co-ordinator of the Labour Party’s 2001 general election campaign, agrees, but argues that voters still need a vehicle for collective choices and compromises: “The ballot box must be much more than a customer complaint box. It’s a bigger undertaking than just expressing an individual preference.”

Since the war, parties in power have fostered peace and prosperity and consequently have bred a certain amount of public contentment which militates against activism. Although relative inequalities persist, class identities and their institutional associations are easing.

According to Mori, the social research organisation, when asked in 1999, 65 per cent of the public agreed that “I don’t feel I belong to any one social class,” and 69 per cent agreed that “Social class is nowhere near as important in Britain as it used to be.”

Even so, a year later, only 17 per cent agreed that “Britain is now a classless society,” while 76 per cent disagreed. As class politics has become less visible, the chance of someone feeling “strongly attached” to a political party has declined even more steeply than their likelihood of voting.

Yet after the party we may wake up with an almighty hangover. The decline of parties and the resulting vacuum of grassroots political energy means we are about to enter a period of political instability, at least in the developed countries, with potentially dangerous implications. Parties need organisational and legal infrastructure, including local branches, to manage and mobilise activists on a national scale and to contest elections and develop policy.

At the same time, the flash-fire effect of media exposure brings to the fore politicians and parties who are well known for being stars, or being scandalous, or both. Televisual power combined with more flexible, consumerist voter attitudes favours more democracy of a kind that can be defined by celebrity power, coming from nowhere to dominate the agenda.

Film star Arnold Schwarzenegger was the Republican nomination for governor of California, but in effect he had a personal agenda. An “anti-political” candidate, Schwarzenegger’s close circle includes Democrats.

Now his administration, like many others in the US, works on an issue-by-issue basis rather than having a set of shared values or principles enshrined in a manifesto or party structure. The UK Independence Party showed the same trend, even if their stars were B-list.

These are signs that we need to look beyond formal politics for a glimpse of a more positive future. The model of political parties as mass membership organisations that have been around for more than a century and are able to mobilise armies of activists and support parliamentary democracies is gone forever.

The question we face now is what comes next? For political leaders the challenge is to find new sources of political energy and legitimacy in the 21st century and to work out how to build relationships with those individuals and organisations. It will almost certainly mean doing things differently.

Everywhere in the developing world, non-governmental organisations and single-issue campaigns seek to combine simple propositions with “pass-it-on” recommendations; Jubilee 2000 and Drop the Debt campaigns are British examples; Pace (the Italian peace movement) and anti-Iraqi war campaigns throughout Europe are others.

In Australia a sophisticated system of single issue campaigning and proportional representation has created a new role for minority parties in parliament. The Greens have more power and influence in pressuring mainstream parties on issues ranging from free trade to national parks.

All of these campaigns are evidence of a new political era around the world. The 2003 protests against the war in Iraq mobilised more people in European capitals than the total party memberships of those countries. In the UK the largest political gathering of the autumn political party conference season won’t be the Conservatives, Labour or the Liberal Democrats but the estimated 30,000 people who will converge on London for the European Social Forum, a gathering of groups seeking global social justice.

The big question for the coming political seasons is: can these fluid, here-today-gone-tomorrow network-based organisations continue the role of permanent mediation carried out by political parties for most of the 20th century? On a first view, it would seem they can’t.

Their policy-making processes cannot aggregate the different issues, compromises and institutional interests that have been necessary to construct lasting, successful political alliances. The selection procedures for parliamentary candidates may look like a closed shop in many countries, but the alternative seems to be celebrity-based populism.

And so we have a lousy choice - between forcing political talent through the sieve of local party influence when those parties are increasingly detached from the communities they claim to serve; or acclaiming an established star or a populist who’s hit a rich political vein.

As yet, there is no clear sign of a third way for a politics that is popular as well as responsible. It may lie in reactivating local engagement; in the media recognising that they can damage as well as support democratic institutions; in campaigning bodies transmuting into new types of party structures; in the internet and other new media making real, as well as virtual, connections.

There are some signs of all of these things happening but they haven’t yet fused. A necessary first step is to recognise that political parties, the modern butts of scorn, are ill, and it could be terminal.

Tom Bentley is the director of British think tank Demos, and Paul Miller is a senior researcher at Demos.