The cross-party committee has reached near-unanimous agreement on the novel proposal, due to be published in a report on Thursday.
Labour is officially opposed to an independent central bank, arguing that a Bundesbank-style institution would lack parliamentary accountability. John Major has invoked similar reasons for resisting the growing clamour for the reform, ignoring the entreaties of two former Chancellors, Norman Lamont and Nigel Lawson.
The committee's report will call for the bank to have stable prices as its sole objective, which it would pursue free of political manipulation, such as pressure to slash interest rates before elections.
But Parliament would be allowed to intervene if current anti-inflationary policy was causing severe economic difficulties - an oil price crisis or a significant event such as the unification of Germany, the backdrop to this summer's collapse of the exchange rate mechanism. It would also be allowed to reject monetary targets which the Government would have to present each year.
The controversial recommendations are likely to mean increasing isolation for Mr Major over the concept. Eddie George, Governor of the Bank of England and a determined inflation fighter, wasted little time in declaring his support.
Moreover, the report is unlikely to suffer the fate of many select committee deliberations, which are not debated as of right. One of the committee's Tory members, Nicholas Budgen, MP for Wolverhampton South-West, came top of last month's ballot of Private Members' Bills. The top six MPs are guaranteed a day's debate on their chosen Bills.
Mr Budgen, a leading Euro- rebel and arch opponent of the single currency, announced that he would introduce a Bill calling for an 'autonomous' central bank.
The committee had been moving towards endorsing the New Zealand model, under which the central bank and the government agree a contract, with the government setting objectives and the bank responsible for pursuing them. Agreement was reached last week on the final set of proposals.
Kenneth Clarke, the Chancellor, is still lukewarm publicly about full-blown independence, although he announced in the run-up to the Budget that, in future, the Bank of England would decide the precise timing of borrowing-rate changes.
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