MPs are to have their taxpayer-funded expenses slashed in a bid to restore the public’s faith in Parliament, under shock proposals announced today by Gordon Brown.

Sweeping changes to the system – and in particular the controversial second home allowance – are to be put to a vote in Parliament as early as next week, said the Prime Minister.

He said the interim proposals to tidy up the system and save money would result in the MPs’ expenses and allowances system becoming “simpler and less generous”.

The additional cost allowance which is supposed to be used by MPs to pay for accommodation in London would be axed in favour of a flat rate payment based on attendance.

The flat rate allowance would be paid only when Parliament is sitting.

Under the proposals claims for food, furniture, white goods, fuel, mortgage interest, rent and council tax would be scrapped.

MPs’ staff would become directly employed by the House of Commons rather than by MPs themselves, and receipts would be required for all other transactions, such as travel and communications, including those under £25.

MPs’ final salary pension arrangements are also being investigated, and the Government is asking temporarily for an additional £60 a month contribution from members this year.

The PMs proposals come amid public anger over reports about MPs, including cabinet ministers Jacqui Smith and Geoff Hoon, using the system to claim for their family homes rather than those in London.

By making his announcement on the Downing Street website today, the Prime Minister will be hoping to shame MPs, who have resisted changes to the system in the past, into voting for his proposals.

The public standards watchdog, Sir Christopher Kelly, is already carrying out a review of the expenses and allowances system.

Mr Brown said: “We have to act urgently with interim proposals to restore the public’s confidence that MPs are there to serve the public, and not to serve themselves.

“I want a vote to overhaul the system as early as next week.”

He added: “The issue of expenses is casting a cloud over the whole of Parliament.”

By London Editor John Hipwood