Michael Martin faces elevation to the House of Lords just as the Upper Chamber prepares to overhaul its system of expenses to give peers a less generous deal than before.

The Speaker will move from the eye of one expenses storm to another as the House of Lords is today expected to launch an independent inquiry into the £18m a year claimed by peers for expenses.

This will give Mr Martin’s new Parliamentary home a familiar feel. Speakers are given a peerage on completion of their time in the chair regardless of the circumstances of their departure.

Nick Clegg, the Liberal Democrat leader, has already said that he opposes the move on the ground that he does not believe that any MP should automatically be handed a peerage.

However, the party is unlikely to do anything to stop Mr Martin’s new role, despite the suggestion of unhappiness in certain sections of the Lords at his arrival.

Mr Martin’s future outside Parliament is far from certain, and he was resisting his removal from the post until the last minute.

It fell to Gordon Brown to visit Mr Martin in his office on Monday night to deliver his verdict.

Mr Brown didn’t - quite - tell him to quit. He knew his host too well to corner him. Instead, Mr Brown invited his colleague of three decades to “reflect on what has just happened”.

Mr Martin got the message and announced yesterday that he was relinquishing the job in just over a month, so becoming the first Commons Speaker to be effectively forced out of office for more than 300 years. In 1695 Sir John Trevor was sacked from the post for taking a bribe.

Even Mr Martin’s friends such as Lord Foulkes, a staunch ally, were speculating — wrongly — that he would not stand down as an MP in Glasgow until the election.

“I understand people from Springburn, in his constituency, have been contacting him and his office urging him to stay on,” he said.

However, the Speaker is elected unopposed, with the other main parties not standing, and would therefore be unable to return to the Labour benches after standing down. Mr Martin’s spokeswoman confirmed that he would leave the Commons when he gave up the Speaker’s chair.

His departure will also mean that he must move out of the Speaker’s residence.Isolated in the splendour of their private apartment overlooking the Thames, Mr Martin and his wife, Mary, became an easy target of Commons gossip which, in turn, fed a tabloid staple: the working-class couple hopelessly out of place at one of London’s grandest addresses.

His exit will be cushioned by a gold-plated pension which works out at one of the best in the public sector.

He has been an MP for 30 years so will get the full parliamentary pension, up to £43,177, and his annual Speakers’ pension of half of his salary — a further £38,452 a year. To get such an income on the open market you would need a pension pot worth around £1.2million. This extraordinary financial settlement for former Speakers is non-contributary. Whether there are any roles outside Parliament for Mr Martin remains to be seen. He left school at 15 to become an apprentice sheet-metal worker. He became involved in his union and joined the Labour Party at 21. He was elected to Parliament in 1979 and has been an MP representing northeast Glasgow ever since. Many expect him to return to Glasgow — where he goes most weekends — for much of the time after he stands down.

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