In 2014, the then opposition leader Belden Namah challenged the deal between Australia and PNG to open the Manus centre for offshore processing of asylum seekers who had tried to reach Australia.
PNG's Supreme Court last month ruled that the Manus arrangement was illegal.
Belden Namah said the ruling nearly three weeks ago showed that Mr O'Neill attempted to vandalise and compromise PNG's constitution to serve the policy interests of a foreign government.
While the prime minister declared following the ruling that the centre would be closed, the governments of PNG and Australia have yet to settle on what to do with the asylum seekers and refugees still on Manus.
Mr Namah said he was giving the PNG and Australian governments three months to close down the facility.
Furthermore, he has called on Mr O'Neill to resign due to what he describes as mounting governance and economic crises.
The Vanimo-Green River MP was also partly responsible for another successful Supreme Court challenge against an O'Neill government initiative.
The 30-month grace period amendment, which further protected PNG's government from motions of no-confidence in parliament, was declared unconstitutional last year.
Belden Namah cited the latest ruling as further evidence that Peter O'Neill was prepared to compromise and vandalize the constitution to build his personal wealth while the country was brought to its knees.
Defending the constitution
Mr Namah's call came as police fraud squad detectives recently made a series of high profile arrests linked to a major fraud case implicating the prime minister.
The probe stems from investigations by the anti-corruption unit Taskforce Sweep.
An arrest warrant was secured in 2014, but fraud detectives remain stayed from arresting Mr O'Neill on that charge by a judicial review still before the courts.
Claiming PNG needs an urgent rescue, Mr Namah said he and his colleagues in opposition had done all they could to defend the constitution and hold the prime minister accountable, but that the people must take the country back.
"The whole country needs to rally behind the university students, and the PNG anti - corruption police and Task Force Sweep Team and demand the immediate resignation of the Prime Minister," said Mr Namah.
The prime minister has repeatedly claimed his innocence over the fraud case and denied there was any evidence of wrongdoing on his part.
However Mr Namah said the Prime Minister must clear himself from allegations of corruption through the institutions of state that have worked very well for 40 years since independence.
"Papua New Guinea will be no more if this man, Peter O'Neill is allowed one more day in office" he said at a press conference in Port Moresby yesterday.
The former opposition leader said a new government or prime minister was needed as a matter of urgency to review, reform and take corrective measures to the economy and save the nation from total collapse.
"Our corruption index rating has gone over the roof, our economic and financial rating nosedived to negative value, and as an investment destination, we have withered away".