Paul Sweeney, who lost his Glasgow North east constituency to the SNP on Thursday, is now calling for an "ultimatum" to be presented to the new Tory Government demanding change.
He admitted that the constitutional issues of independence and Brexit have "bedevilled" Labour in recent years.
"I think the Labour movement in Scotland, which at the end of the day during the 1980s, galvanised to deliver the movement that created the Scottish Parliament , has to now reflect on where we go from here," Sweeney told the BBC's Politics Scotland today.
"Where we were successful in the 1990s was saying that we recognise that the United Kingdom was dysfunctional as a state. And it is - I think it's quite clear that the way the British state is constructed is not sustainable.
"We have to understand what we want to see.
"I think we need to develop a clear policy that is actually a form of an ultimatum.
"We say to the British Government that unless you recognise the body politic at large in Scotland is not willing to accept the current status quo of the British state and has to recognise that there needs to be a major engagement with the Scottish body politic to reform the British state and recognise the difference of opinion in Scotland, the United Kingdom is unsustainable.
"I think we need to present that as ultimatum and say you need to present an option on confederation, radical reform."
Sweeney said that as with the previous SNP Westminster landslide in 2015 in Scotland, many people who previously voted Labour fell that we didn't represent them over a "major constitutional schism" and spurned the party.
"I think we've seen a similar situation play out in the north of England and that's really bedevilling Labour," he said.
"We're a party that's set up to deal with class and social justice issues. We're not really set up to deliver a particular binary issue on a constitutional issue.
"That's really bedevilled us over the past five years because these two big monumental constitutional issues have really split the Labour vote."