They will finally be required to submit receipts for all claims and prevented from employing taxpayer-funded staff directly. Greater London MPs will lose their second homes expenses.
MPs with second jobs will also for the first time be forced to publish details of their employers, earnings and the number of hours they work.
But the most contentious issue - of the £24,000-a-year second homes allowance available to all non-London MPs - was kicked into the long grass again.
Faced with the prospect of a second Commons defeat in 24 hours, ministers abandoned attempts to get MPs to agree the broad principles of a new system at the 11th hour.
Commons Leader Harriet Harman announced this afternoon that the Government was accepting calls for any move on second homes to be deferred until after an independent inquiry.
Her decision came after David Cameron said the Tory frontbench would back a motion tabled by the Commons Standards and Privileges Committee to postpone any decisions.
Commons Speaker Michael Martin refused MPs the opportunity to vote on similar motions relating to the other issues, however, and the Government's proposals were overwhelmingly backed.
Sir George Young, chairman of the Standards and Privileges Committee, questioned the Government's decision to press on with the less controversial reforms.
His committee had urged that the Commons did not "pre-empt" the findings of an inquiry by the Committee on Standards in Public Life, which is expected to take several months.
Sir George said tonight: "I don't quite understand the logic of saying we should wait and then ploughing ahead.
"It just doesn't seem to me a very sensible way of proceeding."
Those measures agreed tonight are intended only as interim reforms pending the outcome of the inquiry by the Committee on Standards in Public Life, chaired by Sir Christopher Kelly.
Cabinet Office Minister Liam Byrne defended the decision to press ahead, saying: "Parliament had never been able to decide these issues.
"What Gordon Brown has just done is broken this deadlock."
Downing Street dismissed claims that the Prime Minister's authority had been damaged by today's move on second homes as "complete rubbish".
He insisted it would make no "material difference" as Sir Christopher had already indicated he would look at Mr Brown's preferred alternative of a fixed rate attendance-based allowance.
The Prime Minister was already reeling from the Government's defeat in the Commons yesterday over the defeat of Gurkha veterans.
The changes adopted by the Commons this evening mean:
* MPs with outside earnings will have to declare all details of their second employment, including how much they have earned and for how many hours' work on non-Westminster business, whether it has a bearing on their Parliamentary work or not;
* MPs living within 20 miles of the Houses of Parliament, regarded as commuting distance, will no longer receive any form of second homes allowance, regardless of intended reforms of that category;
* All expenses claims will have to be supported by a receipt, after the removal of the £25-per-item lower threshold;
* MPs will no longer be able to directly employ staff, such as researchers or secretaries, who are paid out of the public purse. Such staff will still be personally appointed by MPs, but be employed centrally by the House of Commons.
But the biggest running sore of the MPs' expenses controversy is set to rumble on, with the vexed second homes issue left to Sir Christopher's committee to address.
The Prime Minister had wanted to agree reforms - announced suddenly in a YouTube clip last Tuesday - on that issue today.
But he was forced to back down on his demand for the allowance to be replaced by a per diem flat rate attached to attendance. Opposition leaders attacked the proposal as even less transparent and effectively an allowance for clocking on.
The need to reform the system has been brought into focus by recent controversies over ministers' claims, including Home Secretary Jacqui Smith's for her husband's blue movies.
MPs voting against the move to declare details of all outside earnings were:
* Conservative: David Amess (Southend West), James Arbuthnot (Hampshire North East), Christopher Chope (Christchurch), Sir Patrick Cormack (Staffordshire South), David Curry (Skipton & Ripon), Christopher Fraser (Norfolk South West), Douglas Hogg (Sleaford & North Hykeham), Michael Howard (Folkestone & Hythe), Bernard Jenkin (Essex North), Daniel Kawczynski (Shrewsbury & Atcham), Greg Knight (Yorkshire East), Peter Luff (Worcestershire Mid), Nicholas Soames (Sussex Mid), Robert Syms (Poole), Sir Peter Tapsell (Louth & Horncastle), Ann Widdecombe (Maidstone & The Weald), Lady Ann Winterton (Congleton), Sir Nicholas Winterton (Macclesfield), Sir George Young (Hampshire North West)
* Liberal Democrat: Alistair Carmichael (Orkney & Shetland), Nick Harvey (Devon North), Mark Oaten (Winchester), Lembit Opik (Montgomeryshire)
* Labour: Andrew Dismore (Hendon), Dai Havard (Merthyr Tydfil & Rhymney), James McGovern (Dundee West), Gordon Prentice (Pendle), Paddy Tipping (Sherwood), Mike Wood (Batley & Spen)
* Independent Kidderminster Hospital and Health Concern: Dr Richard Taylor (Wyre Forest)
* Independent: Robert Wareing (Liverpool West Derby)
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