Ninety MPs have backed the move to stretch the grace period from 18 months to 30 after the election of a Prime Minister, with only 14 opposition members voting against it.
Mr O'Neil told parliament his government must be given up to two and a half years to demonstrate that it can deliver improvments to roads, schools and hospitals, areas which he says are in bad shape as a result of prolonged instability.
But the opposition leader Belden Namah is planning a court challenge to the new law, which he says is solely designed to keep Mr O'Neil in power and will only lead to increased corruption.
Speaker: PNG Opposition leader Belden Namah
NAMAH: We have now passed the law to legalise one man to control this country. The powers of parliament, which is the power of the people that is vested in the Constitution through the elected representatives of the people, have now been transferred and surrendered from parliament to executive government. This is the very dangerous move in a democracy like Papua New Guinea, we have witnessed in the last seven months, of the leadership for Peter O'Neill - I have through paid advertisement publicised most of the reckless and ignorant and arrogant decisions made by Prime Minister Peter O'Neill. All I can say is only time will tell.
Today those so-called leaders, like Don Polye, William Duma, even our two founding fathers, who contributed in the formulation of the Constitution will regret. Because what has happened now, those who have voted for the bill, they have become insignificant, they have weakened their own bargaining and negotiating power for projects for their districts, as simple as that. They have now put themselves into voluntary exile. I say again, I repeat myself, they will regret. Because from now on, Peter O'Neill is the most powerful man in the country. People complained when the Somare Government, the National Alliance-led government, was in office for nine years. They're talking about stability. The National Alliance Government had stability that they enjoyed for nine years. What happened? Cabinet ministers complained of a "Kitchen Cabinet", Papua New Guineans complained over "Kitchen Cabinet". They had appropriated 76 billion. What are the social indicators on the ground right now after nine years of governance? Things have gone from bad to worse. A few individuals seized control of power. They made decisions for their own benefit and not for the benefit of the silent majority, which is seven-and-a-half-million people of our beautiful country.
The Opposition has now taken up a legal challenge, we will file a Supreme Court reference, because we have cited in that particular amendment that it was not done properly. In the gazettal notice they only plugged up the number 18, instead of 30. They did not say this is the current law and then put the proposed law. So from the start, they have breached the Constitutional process and the Constitutional requirement in putting this Constitutional amendment together.
When someone makes that vital mistake, you know that his motives is evil, he's rushing. Even when a thief goes and steals at night, he will still leave his footprints, to be caught the next day. But I want to say this to the people of Papua New Guinea, to the voters of Papua New Guinea, today is a sad day in the history.
Opposition will fight for you without fear and favour by whatever legal means possible and if we are successful, which I believe, through God's power, through divine intervention, and the power of the Constitution. Because next to Bible is the Constitution of the country. When this law is repealed, and we go back to the drawing table, the PM must resign.
PARLIAMENTARIAN : Yeah, yeah, yeah, yeah.
NAMAH: Peter O'Neill must resign, because it will only demonstrate selfishness and the greed in one man, so that he can entrance into power for personal benefit.