Now Labour MPs revolt over reforms to expenses

Prime Minister's plans in crisis as protests grow over 'clocking in' payments

Gordon Brown's plan to pay MPs about £150 a day to "clock in" at Westminster was in crisis last night after it was denounced by senior Labour backbenchers and the parliamentary sleaze watchdog.

The Prime Minister could be forced to withdraw the contentious scheme, which would replace the discredited £24,000-a-year second homes allowance, in order to avoid a humiliating defeat in the Commons next week.

The proposal – the central measure in his plans to overhaul Westminster's expenses regime – is opposed by the Tory and Liberal Democrat leadership and senior Labour figures. Government whips are preparing to warn Mr Brown about the strength of opposition to the plan.

The clocking-in idea also came under withering attack from Sir Christopher Kelly, the chairman of the Committee on Standards in Public Life, who said the public would have no confidence in an allowances system devised by the politicians.

His intervention is a serious setback for Mr Brown as he has commissioned Sir Christopher to draw up proposals for sweeping reform of expenses after a stream of damaging disclosures about lavish claims by ministers.

The Prime Minister is desperate to have a new system in place before the publication in the summer of 700,000 pages of receipts claimed by MPs under the second homes allowance.

Sir Christopher, who said that parliamentary expenses was "the single most damaging issue for public trust in politicians" in the past 15 years, agreed that reform was essential.

But he warned: "This is not something that should be left to politicians to sort out for themselves.

"If public confidence is to be restored, there needs to be an independent inquiry by people with no political agenda of their own which can look hard at all the evidence and that is open to anyone who wants to contribute."

He said he was not surprised that Mr Brown had failed to win support for the clocking-in proposal from David Cameron, the Conservative leader, and Nick Clegg, the Liberal Democrat leader, as there was a "pretty powerful argument" against it.

Sir Christopher added that the public would have "great difficulty" accepting a system that enabled politicians to be given a daily allowance just for turning up. Senior Labour figures joined the backlash against the idea of a daily allowance that is likely to be fixed at about £150.

Critics fear that handing out the cash – without MPs submitting receipts to justify their claim – will be seen by the public as paying politicians just to turn up for work.

Three former members of the Government – Michael Meacher, Mark Fisher and Graham Allen – joined senior Tories and Liberal Democrats in signing a letter calling for the plan to be delayed. Tony Wright, the chairman of the influential Public Administration Select Committee, also opposed it. They wrote in the letter: "There are serious practical difficulties which need to be thought through.

"A measure of this far-reaching significance would benefit from a little more time, scrutiny and public debate, rather than being precipitately rushed through."

Last night, Downing Street insisted it was pressing ahead with the proposals but there were signs the Government was considering a retreat.

But Harriet Harman, the deputy Labour leader, told the Commons: "I admit that we will not reach a perfect solution, but it would be good if we were to try to find as much agreement as possible."

Later she said: "We do not want to precipitate a load of unintended consequences."

Labour sources admitted that the exact nature of the proposals to be put to MPs next Thursday was still being considered.

David Heath, the Liberal Democrat spokesman on Commons matters, said Mr Brown's scheme had been "drafted on the back of a fag packet".