BRITISH MPs fiddled their expenses as a "displacement activity" because parliament had become irrelevant and ineffective, Speaker John Bercow says.
Bercow suggested the 2009 scandal was as much a symptom of decades of decline as "malice or corruption" as he urged action to ensure Westminster kept up with the modern world.
A special commission will consider how to use the digital revolution to enhance democracy - including potentially bringing in e-voting.
Technology firms such as Google, Facebook, Apple, Twitter and Microsoft will be asked to give evidence, with a report due to be published before the general election in 2015.
In a speech to the Hansard Society, Bercow said after becoming Speaker in June 2009 he feared for the future of parliament, describing it as a "virtual corpse".
"The blunt truth is that the expenses debacle was a particularly embarrassing layer of icing on an especially unappetising cake," he said.
"The reality in 2009 is that the House of Commons as a meaningful political institution, an effective legislature, had been in decline for some decades and was close to reaching the point where it had become, to distort Walter Bagehot slightly, a dignified part of our constitution without much actual dignity.
"The House appeared to be little more than a cross between a rubber stamp and a talking shop which had taken to collective activity such as the imaginative interpretation of what might be a legitimate expense claim as much as an odd form of displacement activity as out of any shared sense of malice or corruption."
But an influx of new MPs in 2010, the novelty of coalition, and procedural changes such as forcing ministers to answer more urgent questions had sparked a revival.
"Far from being in the final twitches of our mortal life, the virtual corpse has staged an unexpected recovery," he said.
"It turns out that in the spirit of Dr Who, the parliament elected in 2010 has not been about death but about regeneration."
But although the Commons was in a "better place than four years ago", there was still a huge challenge to adapt to the digital age.
"I am announcing today the creation of a Speaker's Commission on Digital Democracy, the core membership of which will be assembled in the next few weeks, supplemented by a circle of around 30 expert commissioners and reinforced I hope by up to 60 million members of the public," Bercow said.
"This exercise will start in early 2014 and report in early 2015, a special year for parliament as it will be the 750th anniversary of the de Montfort parliament, along with the 800th anniversary of the Magna Carta, the document that set the scene for the 1265 Parliament to come later.
"Digital democracy will have some universal features but others which vary nation by nation.
"It is yet another change which pushes against formality and for flexibility.
"Its elements might include online voting, e-dialogue between representatives and those represented, increased interconnectedness between the functions of representation, scrutiny and legislation, multiple concepts of what is a constituency, flexibility about what is debated when and how, and a much more intense pace for invention and adaptation.
"What we are talking about here is nothing less than a parliament version 2.0."
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