Prime Minister Gordon Brown today said he was ready to consider withdrawing the party whip from Labour MPs who refuse to repay expenses, while David Cameron said Tories who did not co-operate would be barred from standing for the party.
The warnings came amid signs of deep anger at Westminster over the audit of expenses carried out by former Whitehall mandarin Sir Thomas Legg.
Senior Labour backbencher Sir Stuart Bell said there was "a sense of grievance" among MPs that Sir Thomas has decided to impose a retrospective cap on expense claims for cleaning and gardening costs at their second homes.
And Conservative former minister Ann Widdecombe said there was "a big question of the legality" of the decision, which is expected to result in five or even six-figure repayment demands for some MPs.
Mr Cameron said that any Tory MP who refused to pay back sums demanded by Sir Thomas would be barred from standing for the party in the coming General Election.
And when Mr Brown was asked whether he was ready to withdraw the whip from Labour MPs, he told reporters: "If, of course, people are not prepared to co-operate, then we will have to consider that action."
Mr Brown yesterday agreed to pay back more than £12,400 for cleaning, gardening and decoration costs, and urged other ministers to comply with Sir Thomas's findings.
And Mr Cameron told GMTV: "In the end, if people are asked to pay back money and if the authorities determine that money should be paid back and they don't pay it back, in my view, they can't stand as Conservative MPs."
Writing to MPs yesterday to set out the provisional findings of his review of expense claims over the past five years, Sir Thomas explained that he had decided on a £2,000-a-year limit for cleaning and £1,000 for gardening costs because no maximum level had previously been set.
"Some limits must be regarded as having been in place to prevent disproportionate and unnecessary expenditure from the public purse," he wrote.
Miss Widdecombe told Sky News: "I think he has exceeded his remit - I think he has done so to meet a very widespread concern that people were using the second allowance as a form of income, but in fact that is a concern for the other review from Sir Christopher Kelly."
MPs have been given three weeks to respond to Sir Thomas's findings, and he is expected to deliver his final report to the Members Estimate Committee, which oversees expenses for the commons authorities, on November 9.
MEC member Sir Stuart Bell said there was "absolutely no prospect" of the Commons authorities throwing out the report, and dismissed as "balderdash" suggestions that MPs might take legal action to hold on to their expenses.
But he told the BBC: "He has introduced new rules retrospectively, he has introduced caps retrospectively, and that is against the fairness and the rules of natural justice."
Mr Brown, speaking during a visit to a north London housing estate said it was time to call an end to the "discredited" expenses system.
He explained: "The important thing is that this system is being cleaned up. Some people are being presented with letters about new rules that are being brought in retrospectively by Mr Legg, but at the end of the day people have got their letters, they've got three weeks to reply, they can make their representations.
"But we've got to call an end to this and therefore people must abide by the decisions that are made and make the payments that are appropriate; parliament will require them to do so.
"If that were not to be the case the parties would of course take the actions that were necessary but parliament is going to require the action that has got to be taken so we bring an end to a discredited system. We start a new system as quickly as possible and people can say goodbye to the old days where things that happened should not have happened."
Business Secretary Lord Mandelson is paying back £800 after being told by Sir Thomas that his claim for tree surgery work in the garden of his constituency home in 2004, when he was MP for Hartlepool, was excessive.
A spokesman for Lord Mandelson said: "Thomas Legg has deemed that any claim in excess of £1,000 for gardening in any one year warrants repayment.
"His provisional conclusion with regard to Peter Mandelson assesses that £800 is in excess of the new criteria he is now applying. Lord Mandelson will pay this money in full."
Lord Mandelson made the claim shortly before quitting Parliament in 2004 after branches from a tree in his Hartlepool home grew over neighbours' property.
Leader of the Commons Harriet Harman this morning briefed Cabinet on the Legg report process and later addressed a special meeting of Labour backbenchers.
Justice Secretary Jack Straw revealed that he had been asked to repay £600 after it emerged that an error had led to him being paid the same money twice in 2004.
Mr Straw told BBC Radio 4's World At One: "I have already written the cheque and it is in the post."
He said a lot of MPs had "relatively high emotions" because of their concern about Sir Thomas's retrospective application of limits.
But he added: "What we have very strongly advised colleagues to do is to respond to the process and take part in the process.
"Sir Thomas has said these are provisional conclusions he has come to, and those members are entitled to hope that Sir Thomas will use the same care in looking at the representations as he apparently has in coming to the original conclusions."
Labour backbencher Martin Salter, who did not receive a letter from Sir Thomas as he does not have a second home, said there was "a lot of anxiety and anger" in the House of Commons, with some MPs considering legal action.
Mr Salter told World At One: "It seems quite incredible that someone can come along and reinterpret the rules from four or five years ago and then apply a totally different set of criteria and ask people to be judged against that.
"The vast majority of MPs - especially those facing the electorate - have no option but to pay it back, however monstrously unfair it may be in some cases.
"But I think there are some MPs who will feel very aggrieved at having the rules reinterpreted five years down the line, who may mount a legal challenge. Any attempt to apply a retrospective value judgment is undoubtedly going to be subject to challenge.
"Far from drawing a line under this appalling situation, which has dragged politics into disrepute, it is going to make the situation many times worse."
Miss Widdecombe told the programme: "If any other employer did this, he would be up before a tribunal. I have spoken informally to a number of practising lawyers and they say that it is contrary to the rules of natural justice."
She added: "Everybody is very alarmed by the degree of public anger... We are so completely cowed now that we say 'Let's take the path of least resistance'. All the leaders are taking the path of least resistance, but the person who should be standing up for us is the Speaker of the House of Commons."
But Sir Alistair Graham, the former chairman of the Committee on Standards in Public Life, said it was "a bit rich" for MPs to complain now about Sir Thomas's judgments.
"The Green Book spells out in big black capital letters that it was the MPs' responsibility to satisfy themselves that what they were claiming was reasonable as far as claims on the public purse were concerned."
Derek Conway. whose expenses misuse case began the public outcry that culminated in this year's exposes, said he had been told he had nothing more to repay.
Mr Conway was found guilty by a sleaze watchdog of overpaying his two sons, expelled from the Conservative Party and forced to pay back more than £8,000.
But he said contradictory judgments had left MPs unable to work out "right from wrong".
Like many MPs facing demands for repayment today, the inquiry into his expenses found that everything he claimed was ruled "absolutely in order" by the authorities at the time, he said.
"So I think a lot of MPs are busy trying to work out exactly how they can plan how they do business," he told Sky News.
He renewed attacks on the inconsistency of treatment of some MPs.
"Caroline Spelman, a former colleague of mine, is in the shadow cabinet. She was found guilty of misapplying public funds and continues in the shadow cabinet.
"So I think what most MPs find in this entire saga (is that) there is just no consistency whatsoever in either the judgments that are coming out of the party leaderships or the judgments which are coming out of the committee of standards and privileges.
"In those circumstances it is very difficult for MPs to know what is right from wrong."
He pointed out that Mr Brown had been forced to pay back more than he was, yet he had been "crucified upside down" by the media because his case was the first to become public.
Foreign Secretary David Miliband is to repay £434 "following a bureaucratic error over a mortgage interest payment back in 2004", a spokeswoman said.
There were no other issues raised in his letter from the Legg review.
His brother Ed, the Energy Secretary, was told he had nothing to repay.
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