MPs began facing up yesterday to the prospect of a lonely existence cut off from their families and living in one-bedroom flats in the cheaper districts of London.

Publication of Sir Christopher Kelly’s blueprint for the future of parliamentary expenses was welcomed by party leaders — who are keen to appease voters — but greeted with gritted teeth by many backbenchers.

The report of the Committee on Standards in Public Life made clear that the next generation of MPs must atone for the sins of some current members. Those who have been using the expenses system to pay for mortgages on second homes in upmarket locations close to Westminster will be expected to rent small flats in areas such as Camberwell.

Although MPs with mortgages have up to five years to sell their houses, any future capital gains will have to be handed back to the taxpayer — while those who bought at the top of the market must bear the cost of negative equity themselves.

“MPs do not have to live in Dolphin Square,” Sir Christopher said, referring to the exclusive block near Westminster where many MPs have homes.

There will also be a ban on employment of spouses, and second homes for those within commuting distance of London. Sir Christopher hinted that the prohibition on employing relatives might not have been needed had it not been for the expenses scandal. He said that “whether you like it”, MPs had to consider the reputation of Parliament.

Sir Stuart Bell, who sits on the Members’ Estimate Committee, later hinted that the pill could be sweetened by a pay rise for MPs — from £64,000 to perhaps £89,000 a year.

Gordon Brown, David Cameron and Nick Clegg promised to back the Kelly report. Mr Cameron, the Tory leader, said that the reforms should be accepted in full and ministers made plain they regarded the recommendations as a “package, not a menu”.

Although MPs will be denied a vote on the measures, implementation will be left to the Independent Parliamentary Standards Authority (IPSA), which is obliged to consult MPs before the new rulebook comes into force.

Public shows of dissent in Westminster yesterday were limited to jeers when the Speaker, John Bercow, announced that the head of IPSA would earn as much as £100,000 a year for a two or three-day week.

The Speaker later wrote to all MPs, warning them that any attempt at “procrastination” in implementing the reforms would be viewed unkindly by voters. But Sir Ian Kennedy, the new chairman of IPSA, is already coming under pressure to reconsider many of the proposals.

Roger Gale, the veteran Conservative MP, warned that parts of the report did not stand up to scrutiny and said plans for a rental accommodation agency would turn into “a nightmare”. He branded as “arrogant” Sir Christopher’s insistence that “we must accept this report lock, stock and barrel”.

His wife, Suzy Gale, led a cross-party group of MPs’ spouses who wrote to IPSA extolling the contribution of relatives “to the smooth running of parliamentary and constituency offices”. She said the proposed ban had “not been thought through — it’s a mess and we are jolly cross”.

Phil Cole, husband of the Labour MP Caroline Flint, was a signatory to the letter. Yesterday he asked whether it was fair that an MP could employ a lover, but not a spouse. Because IPSA would be unable to “police MPs’ bedrooms” relationships would be driven underground, he said.

Having given up a lucrative job in public relations to run his wife’s constituency office in 1997, Mr Cole said that he took offence at the implication that “there is something corrupt about me working for Caroline” and urged IPSA to “examine this issue separately from the allowance system”.

Nadine Dorries, the Tory MP for Mid Bedfordshire, said she would be affected by both the ban on employing relatives and, possibly, the proposed ban on second homes for those with constituencies within commuting distance of Westminster. “Last night we left my office at 10.30pm and I arrived at my front door at 12.50am,” she said. She expressed concerns for new MPs “leaving their family behind, staying in one-bedroom flats”.

Peter Bone, the Tory MP for Wellingborough, said: “I am very disappointed. It worries me that Parliament will run into a system that will see only MPs who are very rich or who are sponsored by companies.”

Nick Palmer, the Labour MP for Broxtowe, said he understood public concern over the employment of relatives and was prepared to make changes. “There is a transition period of five years — which one of us has job security for that long?”

Some of those who have been most criticised in the expenses scandal remain bitter. Anthony Steen, the Tory MP for Totnes, said he had been “vilified” for putting in receipts for the running costs of his second home while others who have made significant sums by claiming mortgage interest have “got off scot-free”.

Many others, however, recognised that they would have to “bite the bullet”. Stephen Pound, the Labour MP for Ealing North, said he would suffer severely from restrictions on allowances. “It will hit me personally, financially. But that is a small step towards re- gaining the confidence of the people. There are several shades of guilt, but we are all in the same shadow.”

Reporting team: Sakshi Ojha, Samantha Hockney, Sanne Rooseboom, Sean McCaffrey

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