And Finally... Bumper pay rise for MPs to make up for lost perks

The suggestion, which will spark public fury, came as sleaze-buster Sir Christopher Kelly yesterday ordered an immediate stop on politicians profiting personally at taxpayers' expense.

Sir Christopher, chair of the Committee on Standards in Public Life, also called for disgraced MPs to be stripped of "golden goodbyes" that can be worth more than £60,000.

But he signalled that those who stay in Parliament can expect an inflation-busting increase in their £64,766 salaries to compensate for losing their hugely lucrative perks. Members' expenses last year averaged £144,176.

MPs reacted enthusiastically to the idea, with one ex-minister suggesting they should earn the same as town hall chiefs. They take home more than £100,000 - a figure being touted for MPs.

But others warned a pay bonanza will trigger fresh fury from disgusted voters.

Tory Grant Shapps said: "We are in the deepest recession this country has ever known. The idea that having got this scandal out of the way we should be paid more right now is preposterous."

And Matthew Elliott, of the TaxPayers' Alliance, stormed: "There is no way MPs should receive a pay rise at this time - it would make them look more out of touch and greedier than ever."

Sir Christopher paved the way for a postelection salary increase by saying successive governments had increased expenses instead of giving proper pay rises.

His reforms had "cleared the undergrowth" so the Senior Salaries Review Body, which sets MPs' pay, could look again at their wages.

Vera Baird, the Solicitor General, fuelled their expectations of a pay rise by saying Sir Christopher's reforms will have to be examined to ensure nobody is "priced out" of politics, adding: "I don't want a care worker who wants to come to Parliament to feel they can't afford to run two homes."

But the Lib Dems' Chris Huhne said: "Our pay is over £60,000 a year. That is more than treble the national average.

"It is ridiculous to suggest anyone is going to be priced out."

Sir Christopher unveiled his plans to draw a line under the scandal of phantom mortgages, "flipping" second homes, moats and duck houses at a press conference in Westminster. Mortgage interest payments on second homes will be phased out along with employing husbands and wives, as revealed by the Mirror. Instead, politicians and their families will be put in rented accommodation arranged by the Commons authorities so that they do not get to handle the cash.

A £1,250 a month limit means they will be priced out of exclusive areas in and around Westminster.

Sir Christopher gave MPs five years to lay off relatives and sell off their second homes.

But he announced those who keep claiming for mortgages in that time will have to hand a share of the profits back to the Commons when they sell the property.

Sir Christopher said: "From today there will be no more gains at the public's expense and no more flipping either for any MP."

Claims for fixtures, fittings, cleaning and gardening, which ran to tens of thousands of pounds under the old system, will be banned.

The £25-a-night subsistence and annual £10,000 communications allowance will also go.

From the general election after next MPs who voluntarily step down will lose the generous resettlement grant, which now goes to all those leaving Parliament. Nothing in the proposals will deal with those MPs caught abusing the system who are quitting and refuse to hand cash back.

But Sir Christopher urged the Commons Standards Committee to use its powers to strip them of the grant, which can be worth more than £60,000 for long-serving MPs. He refused to say how many should be punished but explained: "The way in which expenses were dealt with by a large number of MPs was deplorable and the public are quite right to have deplored it."

Responsibility for pay and pensions will be transferred to the new Parliamentary Standards Authority, which will implement and police his expenses reforms.

The authority will face fierce lobbying from MPs who want to water down the proposals and push for a pay rise.

Gordon Brown and the other party leaders managed to stop a public revolt by ordering them to accept the changes. But the PSA will have to consult on the reforms.

Labour MP John Mann, who has campaigned to clean up Westminster, said colleagues were already plotting to undermine them. He went on: "I know for a fact they are, from all parties, meeting in groups, whispering."

And MPs jeered loudly when they heard the head of the authority, Prof Sir Ian Kennedy, will earn £100,000 for what will be a two or three day week.

But Commons Speaker John Bercow wrote to all MPs, warning against attempts to delay reforms. He said: "The public would not look kindly on anything which was perceived as deliberate procrastination.

"There will be consequences of change which may be uncomfortable to members.

"Yet the old structure has been so thoroughly discredited that nothing less than a new system will be enough to restore public confidence."

MPs will have no vote on the PSA's plans, though they will be asked in a few days to approve Sir Ian's nomination by a committee which will be chaired by Mr Bercow.

MPs' SALARIES ACROSS WORLD

France: Deputies receive £211,000 a year in wages, unchecked expenses, staff salaries and travel.

Germany: MPs get £80,880 in wages plus £41,676 entertaining and living expenses and a free rail card.

Italy: Politicians take home £168,000 a year in pay and allowances before tax.

Sweden: MPs earn £53,376, get free travel and rent-free homes.

Japan: Bonuses take pay and expenses to £230,000.

Kenya: MPs receive £90,000 and untaxed expenses in a country where half the population lives on less than 75p a day each.

United States: Members of the Congress and Senate start on around £105,000.