Independent regulator will oversee spending by MPs

The legislation, which would hand the policing of the system to outsiders for the first time, is seen by Gordon Brown as key to the overhaul of the centuries-old convention of allowing MPs to determine their own spending.

The plan emerged as Lib-Dem leader Nick Clegg today demanded that MPs should be barred from their summer break until the crisis triggered by the expenses scandal is resovled.

Mr Clegg insisted Parliament should not be allowed to go into recess until "every nook and cranny" of the political system is reformed.

Cabinet ministers stepped up their own demands for change, with David Miliband backing electoral reform and Tessa Jowell calling for US-style "open primaries" for the selection of Labour candidates for Westminster.

The Prime Minister is keen not to be outflanked by David Cameron and Mr Clegg over the issue of reform and is planning cross-party crisis talks within the next fortnight. The talks will discuss sweeping changes to Commons procedures, possible "recall" elections and fixed-term Parliaments.

Some changes will be enacted in a Constitutional Renewal Bill, but the move to create an independent regulator of MPs' expenses could be placed in a stand-alone emergency Bill. MPs have traditionally been in charge of their own expenses through the Commons Fees Office.

Writing in the Guardian, Mr Clegg set out a 100-day plan to clean up Commons expenses and speed up key constitutional changes.

"Let us bar the gates of Westminster and stop MPs leaving for their summer holidays until this crisis has been sorted out, and every nook and cranny of our political system reformed," Mr Clegg wrote.

"I'm setting out a plan of action to get all the changes we need delivered in just 100 days - making it possible for MPs to be sacked by their constituents, abolishing the House of Lords, getting corrupt money out of politics and changing the electoral system to give a voice to everyone."

The first two weeks of Mr Clegg's timetable for the "total reinvention of British politics" would see Parliament agree to accept the recommendations of the review into MPs' expenses and allowances by the standards watchdog, draw up a Bill to allow for the recall of errant MPs, and impose a £50,000 cap on individual donations to political parties in any one year.

The following period would introduce fixed parliamentary terms of four years from 2010, make ministers subject to confirmation hearings, and lay the ground for a referendum on proportional representation - to be held on day 100.