MPs accept 1.9pc rise - but keep their £43,000 in expenses claimed WITHOUT receipts

The Prime Minister had faced a Commons revolt over his demand that MPs back a 1.9 per cent pay rise - in line with policemen and nurses.

But to "buy" their support he promised not to axe the perk allowing them to charge items costing up to £250 without the need to produce a receipt.

These include household goods such as fridges and toasters, office equipment, and travel costs.

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MPs could, in theory, claim a maximum of around £43,000 in a single year without needing to explain what it was spent on.

Last night Labour back-benchers dropped threats to defy the Prime Minister and rejected the independent Senior Salaries Review Body's recommendation of a 2.56 per cent pay rise.

Instead, they agreed to a rise awarded in two stages, making it effectively worth 1.9 per cent. It will go up from £60,277 to £61,820.

The move spared Mr Brown's blushes as he faced relying on Tory and Liberal Democrat votes to get his way.

But it was claimed ministers had earlier hammered out a behind-closed-doors deal not to reduce the £250 allowance.

The review body's report, published last week, concluded there was "scope for abuse" of expenses and said receipts should be shown for all items costing more than £50.

But ministers decided not to accept the recommendations and passed them to a Commons committee - meaning MPs will have the final say.

One MP said: "Backbenchers were told that in exchange for them voting down the higher pay award, plans to reduce the ceiling for unreceipted expenses claims were kicked into the long grass.

"Gordon Brown has hacked off so many of them that he was worried they would inflict a defeat on the Government over salaries.

"It would have been incredibly embarrassing at a time when the police are being told to put up and shut up over their pay for MPs to be seen with their snouts in the trough."

During yesterday's debate, Leader of the Commons Harriet Harman said: "As MPs are paid out of the public purse, we should show the same discipline in terms of pay increases as other public sector workers."

She also outlined plans to end the "unacceptable" situation of MPs voting on their own pay.

Labour has asked Sir John Baker, outgoing head of the Senior Salaries Review Body, to come up with a new way of setting MPs' salaries.

Theresa May, the shadow Leader of the House, said she supported the Government's proposals.

However, MPs did back a rise of up to £10,000 a year in an office staffing allowance, due to go up from £87,276 to £96,630. This will cost £8million.

Mr Brown also confirmed he would give up hundreds of thousands of pounds worth of pensions payments traditionally due as soon as a prime minister leaves office.

Instead Mr Brown will not accept any pension before he is 65.

Calls for changes to MPs' pension schemes - the most generous in the world - were put on hold.

Chris Mullin, the former Labour minister, said the below-inflation pay rise enabled MPs to "look the police and other public servants in the eye".