Legislation is to be rushed through Parliament to end Westminster's system of self-regulation and impose a new code of conduct on MPs in the wake of the expenses scandal, Gordon Brown announced today.
Misbehaving MPs could be expelled from Parliament or forced to seek re-election if found guilty of gross financial misconduct by the new independent regulator.
And the Prime Minister also called for a public debate on wider reform of the democratic system, including alternative voting systems for general elections and a written constitution.
A bill to complete the final stages of Lords reform - including the removal of hereditary peers and an 80 per cent -100 per cent elected second chamber - will be published before the summer, but is unlikely to become law before the coming election.
Opposition parties have given their backing to independent regulation but today accused Mr Brown of slow progress on constitutional reform since making it a priority on his arrival in 10 Downing Street almost two years ago.
Conservative leader David Cameron said the proposals were designed as a smokescreen to distract attention from the Prime Minister's loss of authority, and called for an immediate general election.
And Liberal Democrat Nick Clegg urged Mr Brown to cancel the Commons' 72-day summer break to ensure the reforms are in place by the autumn.
In a statement to the House of Commons, the Prime Minister acknowledged that public anger over expenses was threatening Parliament's legitimacy. MPs had no more pressing task than responding to the demand for "higher standards of financial conduct from all people in public life", he said.
"We cannot move our country forward unless we break with the old practices and the old ways," said Mr Brown.
"Each of us has a part to play in the hard task of regaining the country's trust - not for the sake of our different parties, but for the sake of our common democracy.
"Without this trust there can be no legitimacy and without legitimacy, none of us can do the job our constituents have sent us here to do."
Mr Brown said he would publish a short bill before recess begins next month to establish the independent parliamentary standards regulator and put the code of conduct on a statutory basis.
Meanwhile, Justice Secretary Jack Straw made clear he will table a separate Constitutional Renewal Bill before the summer break to implement proposals floated in draft form last year, including changes to the royal prerogative to give Parliament a greater say on issues of war and peace.
Mr Brown said that receipts for MPs' expenses claims for the past four years will finally be published on the internet within days, and will be made public online as a matter of routine in future.
The new regulator will take over responsibility for running the expenses system from the Fees Office, check claims and apply "firm and appropriate sanctions" to anyone who breaches the rules. It will also maintain the register of MPs' interests and monitor value for money in parliamentary spending.
The code will set out more clearly "what the electorate can expect from their MPs and the consequences that will follow for those who fail to deliver" as well as potential punishments.
At the request of the House of Lords, Mr Brown commissioned the Senior Salaries Review Body to carry out a review of financial arrangements in the second chamber, where peers are unpaid but can claim lucrative allowances for attending.
The parties will consult on a new "recall" procedure for voters to force a misbehaving MP to face re-election, as well as tougher powers for MPs to be expelled from the House.
At present, MPs cannot be removed even if they are jailed for up to a year. The last to be thrown out was Conservative Peter Baker, who got seven years for fraud in 1954.
A cross-party committee will also look at strengthening the backbench select committees which scrutinise Government activities.
And moves to increase openness will include a drive headed by internet guru Sir Tim Berners-Lee to put more Government data on the web; a reduction from 30 to 20 years in the period before most official papers are released; and the extension of freedom of information legislation to cover private companies undertaking work for the public sector.
Mr Brown appealed to MPs: "In the midst of all the rancour and recrimination, let us seize the moment to lift our politics to a higher standard. In the midst of doubt, let us revive confidence.
"Let us stand together because on this at least I think we all agree: that Britain deserves a political system equal to the hopes and character of our people."
But Mr Cameron retorted: "Isn't it the case that it's not the Alternative Vote people want right now; they want the chance to vote for an alternative Government?
"Aren't these proposals a pretty sorry attempt to distract attention away from a Prime Minister who has lost his authority; a Cabinet full of second preferences; and a Labour Government that has led this country to the brink of bankruptcy?"
And Mr Clegg characterised the package as a "deathbed conversion to political reform from the man who has blocked change at almost every opportunity for the last 12 years".
He called for a referendum this autumn on the voting system for Westminster elections and taunted the Prime Minister: "He has nothing to lose. This is no time for his trademark timidity. Just get on with it."