Expenses scandal claims more victims - but huge payouts await

The expenses scandal claimed further victims last night with the announcement that two Conservative MPs – Sir Peter Viggers and Anthony Steen – will resign their seats at the next election. Sir Peter will step down as MP for Gosport in Hampshire "at the direct request" of David Cameron after spending tens of thousands of pounds on gardening, including a £1,645 bill for a floating "duck island", while Mr Steen, the MP for Totnes in Devon who claimed £87,729 on his luxurious country house, will also leave the Commons.

The future of a third leading Conservative, Bill Wiggin, was also in doubt after The Daily Telegraph claimed that the Conservative whip – a contemporary of Mr Cameron's at Eton – claimed £11,000 in interest payments for a property without a mortgage. He insisted he had not profited and had made "an administrative error", but he could join Labour's "phantom mortage" MPs Elliot Morley and David Chaytor in facing possible criminal proceedings.

Mr Wiggin, the MP for Leominster in Herefordshire, filed for the expenses after declaring that his constituency property was his second home. He stressed yesterday that he meant to claim for his London residence instead.

Public anger at the conduct of MPs is likely to be exacerbated by the news that any MP forced to quit over the expenses scandal will be in line for pay-offs of more than £100,000 and pensions of up to £30,000 a year.

Tory MP Douglas Hogg, who submitted a bill for cleaning his moat, has already announced his retirement, while three Labour MPs – Mr Morley, Mr Chaytor and Margaret Moran, who claimed £22,500 on expenses to treat dry rot at her "second home" over 100 miles from her Luton constituency, will be summoned next week to a disciplinary panel to defend their claims. Gordon Brown has warned that no MP who has "defied the rules" on expenses will be allowed to stand at the next election.

MPs embroiled in the scandal remain entitled to two pay-offs so long as they serve until the general election, rather than resign immediately. All MPs who step down, or are defeated, at an election are paid a "resettlement grant" designed to compensate for loss of salary. It ranges between six months' and one year's pay depending on age and length of service in the Commons.

An MP aged between 55 and 64 who has been in Parliament for 15 years will be paid a year's salary – £64,766 at current rates. The first £30,000 is tax-free. In addition, all MPs can claim a maximum of £40,799 for "winding-up costs" to pay off staff and end office leases. Politicians also benefit from a generous final salary pension scheme heavily subsidised by the taxpayer.

* Two Labour peers, Lord Truscott and Lord Taylor of Blackburn, have been suspended from the Lords for six months after being found guilty of offering to amend laws for cash – the first time such a sanction has been used in more than 350 years.