The Local Government Bill will give councils the power to create their own executive mayors or cabinet-style structures after a referendum triggered by 5 per cent of local residents.
To combat corruption, all councils will be covered by new ethical guidelines, with statutory codes of conduct overseen by local standards committees and an independent Standards Board to investigate allegations of misconduct.
Where allegations are upheld against councillors, a range of sanctions will be available from censure through to disqualification from office. Similar penalties will be written into the contracts of all local government employees.
The extension of mayors to every town and city is seen by Tony Blair as the best means of ending the "one-party states" that have dominated the north of England and South Wales for years. The initiative has been fought bitterly by "old Labour" councils.
The Bill does not, however, include any provision for the extension of proportional representation for local government. Although PR is likely to be introduced in Scotland by the Scottish Parliament, John Prescott, the Deputy Prime Minister, is opposed to similar moves in England and Wales.
The Bill will also give councils a new power to improve the environment, boost the local economy and establish partnerships with businesses.
A new grant will be made available to help town halls plan and commission housing services for the mentally ill, the elderly, the homeless and victims of domestic violence.
After the controversy over Westminster's alleged "homes for votes" scandal, the Bill will give district auditors the power to seek a court decision about the legality of council decisions. Under the current system of prohibition orders, Westminster's former leader Dame Shirley Porter was handed a pounds 26m surcharge by auditors. Her legal case is still being heard in the House of Lords.
Paul Waugh Political CorrespondentReuse content