As part of the European LAGUNA design study on a next-generation neutrino detector, we propose the liquid-scintillator detector LENA (Low Energy Neutrino Astronomy) as a multipurpose neutrino observatory. The outstanding successes of the Borexino and KamLAND experiments demonstrate the large potential of liquid-scintillator detectors in low-energy neutrino physics. Low energy threshold, good energy resolution and efficient background discrimination are inherent to the liquid-scintillator technique. A target mass of 50 kt will offer a substantial increase in detection sensitivity. At low energies, the variety of detection channels available in liquid scintillator will allow for an energy - and flavor-resolved analysis of the neutrino burst emitted by a galactic Supernova. Due to target mass and background conditions, LENA will also be sensitive to the faint signal of the Diffuse Supernova Neutrino Background. Solar metallicity, time-variation in the solar neutrino flux and deviations from MSW-LMA survival probabilities can be investigated based on unprecedented statistics. Low background conditions allow to search for dark matter by observing rare annihilation neutrinos. The large number of events expected for geoneutrinos will give valuable information on the abundances of Uranium and Thorium and their relative ratio in the Earth's crust and mantle. Reactor neutrinos enable a high-precision measurement of solar mixing parameters. A strong radioactive or pion decay-at-rest neutrino source can be placed close to the detector to investigate neutrino oscillations for short distances and sub-MeV to MeV energies. At high energies, LENA will provide a new lifetime limit for the SUSY-favored proton decay mode into kaon and antineutrino, surpassing current experimental limits by about one order of magnitude. Recent studies have demonstrated that a reconstruction of momentum and energy of GeV particles is well feasible in liquid scintillator. Monte Carlo studies on the reconstruction of the complex event topologies found for neutrino interactions at multi-GeV energies have shown promising results. If this is confirmed, LENA might serve as far detector in a long-baseline neutrino oscillation experiment currently investigated in LAGUNA-LBNO.