Speaking at a Polis event at the LSE, Shirky, a professor at New York University and author of 'Here Comes Everybody', argued that bloggers need to find new ways of organising themselves if they are to be a suitable substitute for newspapers.
Further to his comments about the need for control of online group action, Shirky - who writes about the impact of online interaction for society and media - said the threat of urban newspapers disappearing posed problems for maintaining local democracy.
"I am sceptical that without some higher degree of social coordination a loose collection of bloggers will be able to pay enough attention to what is going on at the local level to keep city councils from descending into corruption," Shirky said.
"Of all the challenges posed by transferring from old media models to new media models that is the biggest."
Shirky said new methods of organisation are required for bloggers; he suggested they should operate along the lines of traditional newspaper structures.
"I don't think the gap the newspapers are going to leave can be filled by the bloggers and I think the real work is around social models that coordinate bloggers that get people to perform different functions," he said.
"'I'll report but you write the coverage' or ''I've got this piece of knowledge who’s got something else', because unless you have something like a newsroom I don't think it is going to work."
While Shirky said he had no sympathy for the failure of newspaper business model, he said it was crucial to replace the newspaper's role in reporting government.
"The problems of newspapers are so much of their own making its hard to show an ounce of pity. The people who go down to see the government every day though, just to take a look and see if something is going on - the loss of that function is pretty big.”
“We have to find another way to subsidise journalism. Journalism has never paid for itself and the illusion it did being touted by newspapers is because they don’t want to call too much attention to their brokenness of their business."
He argued that the UK might be better placed to operate a corporate business model than the US, where he sees different and faster types of structural change.
"It's going to be hard because we have never been very fast to reach for our wallets to pay for content online. I think it will be more comfortable here than in the US where we are moving much more to a vigorous non-profit world," he said.
Journalism.co.uk also spoke to Clay Shirky ahead of the event: he explained his 'changed' belief, that there now need to be checks and balances in place if 'aggregate public opinion' via the web is used to prioritise items on the government's agenda.