Claiming the government is incapable of reforming itself, Reza Pahlavi told journalists on Thursday the new crisis caused by blacklisting reformist candidates for the Iran's 20 February national elections highlighted the country's problems.
"It is not a crisis between so-called liberal and radical factions, but between the whole regime and the people. This regime is not reformable. There must be a fundamental change," said Pahlavi.
The only way for the Iranian people to make their voice heard, he added would be "to boycott" the election as no elected body had been able to stand up to the conservative clerics led by supreme leader Ayatollah Ali Khamenei.
Scores of Iranian reformist MPs have vowed to maintain a sit-in in the Iranian parliament, despite the intervention of the supreme leader to order the Guardians Council, a 12 member religious body, to lift its disqualification of the reformist candidates for the election.
A former pilot and father of two who now lives in the Washington area, Pahlavi was training on a US air base in Texas when his father, Muhammad Reza Pahlavi, was forced to leave Iran on 16 January 1979.
He said it was a difficult period for him and his family.
But by refusing to join any political party, Pahlavi says he wants to act as a "catalyst" for change by campaigning for a national referendum for democratic and secular change.
On top of his book on the topic, Winds of Change, Pahlavi appears regularly on radio and television programmes broadcast into Iran from abroad. Internet has also aided his efforts to reach Iranians.
"This regime has so far succeeded in hiding between the Taliban in Kabul and Saddam's regime in Baghdad. Today it is a regime that is withdrawing and can feel that it is weakening"
son of late Shah of Iran
He says he has also had discrete contacts with some members of the Shia Muslim clergy in Iran who favour a separation of religious and state powers.
Acknowledging that there were also problems with his father's authoritarian government, Pahlavi is careful not to raise the possibility of a return to the monarchy.
He said the Iranian people must choose between a republic or a constitutional monarchy.
Despite its record, the monarchy was at least more modern and progressive, he added.
"Today we are in a situation where instead of being 50 years ahead we are one or two centuries behind."
The fall of the Taliban in Afghanistan and Saddam Hussein in Iraq has encouraged Pahlavi that he can play a role in a new Iran.
"This regime has so far succeeded in hiding between the Taliban in Kabul and Saddam's regime in Baghdad. Today it is a regime that is withdrawing and can feel that it is weakening," said the shah's son.
Iran is a country "with 70% of the population aged under 30" that wants to be free and modern, according to Pahlavi. Change, he added, "is a question of time."