The audit, conducted by Democratic Audit based at the University of Liverpool, is the fourth conducted by the research organisation with support from the respected Joseph Rowntree Foundation.
Its earlier audits were conducted in 1996, 1999 and 2003.
The audit lists five 'overarching sets of concerns' from the latest audit, including the rise of corporate power which, it says, "threatens to undermine some of the most basic principles of democratic decision-making".
The audit released today says: "Almost all available indicators suggest that representative democracy is in long-term, terminal decline, but no viable alternative model of democracy currently exists".
It adds: "The UK s constitutional arrangements are increasingly unstable and it is by no means clear what a reformed Westminster model would look like".
The report titled 'How Democratic is the UK? The 2012 Audit' says that public faith in democratic institutions in Britain "is decaying, and reforms aimed at restoring public confidence in democratic arrangements have tended to prove, at best, ineffectual and, in several cases, counter-productive".
Fifth, the audit says that "political inequality is widening rapidly and even provisions intended to guarantee basic human rights are increasingly being brought into question".
The research organisation said that its assessment methodology for the audit was based on the two basic principles of representative democracy - popular control and political equality: how far do the people exercise control over political decision-makers and the processes of decision-making? And how far is there political equality in the exercise of that control?
The methodology, it says, had been followed across the world, including by at least 21 countries, international bodies such as the UNDP and the Open Society Institute, universities and research institutes.
New concerns that had arisen since the 2002 audit, it says, include the declining circulation of newspapers, and falling consumption of television news.
Tensions had also arisen from demands for greater autonomy, or independence, for Scotland.
Confidence in the integrity of elections may have been undermined by new concerns about electoral fraud, it says, and adds that there were unresolved tensions between notions of parliamentary sovereignty and rule of law.