The salaries of MPs could rise by more than £20,000 a year in return for the second-home allowance being scrapped, under plans being examined by a committee chaired by the Speaker, The Times has learnt.

Sources close to the discussions say that plans to end the Additional Costs Allowance, worth up to £22,100 tax-free, are “very live” among members of the House of Commons Commission, which has been asked to look at the issue.

The Freedom of Information tribunal is expected to rule within days on whether to make public all the details of the Additional Costs Allowance, which is used to pay rent or mortgage costs for second homes, as well as to furnish and feed MPs. At the tribunal hearing a fortnight ago, Andrew Walker, the Commons resources chief, said that MPs could in theory claim a fish tank and food bills unreceipted for up to £400 a month.

This has put pressure on MPs examining the issue to end the allowance, which has existed since the early 1970s.

The favoured plan is to take the average of claims under the Additional Costs Allowance – £17,700 in 2006-07 – and add it to MPs’ basic annual pay of £61,820. On top of this, they would add on 40 per cent, or £7,000 – a process known as “grossing up” to replace the money deducted through top-rate tax. This would take MPs’ salary to about £88,000.

There is understood to be concern, particularly from Labour Members, that such a large increase could be hard to make acceptable to the public. A source suggested that this overall figure would be reduced by about £2,000, however, putting the final figure at closer to £85,000.

“If we were going to do this, MPs have got to accept there is a price for the new flexibility of not having to submit claims through a complicated process. There is a price MPs have to pay for not letting anyone pry into what their affairs. That is probably worth around £2,000, not £10,000,” a source suggested.

The key to defending the move, sources suggest, is that MPs must be able to assert that the overall bill to taxpayers does not increase, because the cost is less than funding the Additional Costs Allowance. The change could also be staged over a number of years, to lessen the political impact.

The move would, nevertheless, be contentious at Westminster because some MPs who currently claim the maximum allowance would lose out while others such as Rob Wilson, the Conservative MP for Reading East, who claim nothing, would be significantly better off. Inner London MPs also claim nothing under the Additional Costs Allowance but receive a £2,700 “London supplement”, although this is thought to have been judged as “too small” by commissioners, so they can expect a rise.

No final decisions will be taken until the autumn, and other models are still also being considered, such as replacing the Additional Costs Allowance with a flat “overnight allowance” such as those used by tribunals.

Under the plans, the Communications Allowance would be expected to survive the review because it had has voted on so recently by Parliament, and the travel budget will stay largely unchanged. MPs also want to keep some form of office expenses, although the manner they are distributed could be changed.

Plans to introduce an additional column in the Register of Members’ Interest in which MPs would declare relatives in their employ have also run into difficulties.

Legal advice to the Standards and Privileges Committee has revealed that the staff contract would have to be changed to make clear they would be named. The system would therefore be voluntary while the contracts are renegotiated.

Sources said it was unlikely that lovers would be covered by the new requirements, as only people who have lived together for two years or more would have to be registered.

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