Gordon Brown is to scrap the system under which MPs decide their own pay as they plan to award themselves an above-inflation rise this year.
The move will be too late to head off a backbench rebellion over this year's increase, but Mr Brown believes the system is out of date, a view shared by many MPs, who face a backlash from voters whenever they give themselves a pay rise.
Sir John Baker, the outgoing chairman of the Senior Salaries Review Body (SSRB), will study how MPs' pay should be settled in future.
One option will be for the body's recommendations to be accepted without a vote. Another would be to give the Government the final say, but MPs may reject that, and the change will require legislation.
The SSRB's proposals for a "catching up" 2.8 per cent rise for MPs this year, and an increase of about 10 per cent over the next three years, will be published next Wednesday. MPs will vote on them on 24 January.
Mr Brown wants to peg their rise to 1.9 per cent, in line with the Government's target for public sector workers. But ministers fear defeat in a free Commons vote because many Tory, Labour and Liberal Democrat backbenchers may vote to accept the proposed 2.8 per cent increase on top of their £60,675 a year.
David Cameron, the Conservative leader, has urged his frontbenchers to vote for a 1.9 per cent rise but some Tory MPs will back a bigger increase.
Chris Mullin, a former Labour minister, said MPs' pay should rise in line with average earnings so they were treated no differently to their constituents.
Ministers are worried that an above-inflation rise for MPs will undermine their attempt to limit public sector rises.
They are in conflict with groups including police, teachers, nurses, local government workers and civil servants over their attempt to impose a 1.9 per cent pay-rise limit.Reuse content