Anger grows over move to stop MPs paying relatives

Spouses employed in Parliament for decades consider legal challenge to proposed reforms

A devastating report into the future of Parliament's controversial expenses regime could be watered down before it is published, because of a growing revolt over the right of MPs to employ their own relatives.

Senior representatives from the Government and parliamentary authorities have urged Sir Christopher Kelly to amend his report and drop an "incendiary" proposed ban on MPs employing members of their family to work in constituency offices and at the House of Commons.

Whips from all main parties have warned that the family ban, which could make more than 200 people redundant, is the most "provocative" element of the six-month inquiry into the expenses regime. A number of MPs' spouses, some who have worked in Parliament for decades, have already complained about the likely ban. MPs claimed yesterday that at least one of their colleagues is facing a legal challenge from her own partner over the alleged "restriction on trade" that a veto would represent.

However, a Labour MP who has campaigned for greater accountability in the expenses system called on his colleagues to accept what the watchdog proposes.

Sir Christopher, chairman of the Committee on Standards in Public Life, is due to publish his report on 4 November. He is expected to recommend an end to the payment of mortgage interest on second homes, to consign the "John Lewis list" to history and to prevent MPs from employing relatives on taxpayers' money.

The Government fears a parliamentary rebellion over the report could reignite the furore over MPs "feathering their nests" at the expense of the taxpayer. Whitehall sources yesterday said the Government did not want to be forced into a position where it could not accept the report in its entirety, and a compromise before publication was being sought.

It is understood that the Government would prefer any embargo on MPs employing relatives not to be retrospective, but to be imposed from the day the Kelly report is published and agreed. The "Year Zero" approach would allow family members recruited before that date to carry on working for MPs. A more contentious "compromise" would be to introduce a family ban on new MPs, while phasing out the employment of existing relatives over a set period.

"There is a lot of anxiety about this, and the loudest complaints are coming from the spouses, rather than the MPs themselves," one party whip said yesterday. "All parties will be expected to let the report go through on the nod, but there is no mood to accept this part. Either there is a compromise or there will be a row, and that would be intolerable."

Suzy Gale, who has worked for her husband Roger, Tory MP for North Thanet, for 27 years, has contacted the Advisory Conciliation and Arbitration Service (Acas) and the Equality Commission for advice on a move that could force her out of work.

But the Labour MP John Mann, a long-term critic of the allowances regime, urged colleagues to rubber-stamp Sir Christopher's proposals: "We don't have the moral authority to reject or amend what he proposes."