Sir Christopher Kelly unveiled his long-anticipated recommendations on the future of MPs' expenses in a Committee on Standards in Public Life report released today.
In sweeping measures, MPs will be banned from claiming for mortgage interest after an "appropriate transitional" period, and employing family members will be phased out over the next five years.
The controversial practice of "flipping" the designation of second homes will also be stamped out as an independent body will determine which is an MP's main residence.
Kelly warned MPs that "this committee will be watching them closely" and his proposals should be implemented no later than the next Parliament. He maintained the stringent new regulations were "fair and reasonable" and essential to restore public trust.
"There is a risk that, as the impact of the revulsion caused by the Daily Telegraph revelation fades with time, some may be thinking of distancing themselves from their earlier expressed determination to implement our report in full," he said at a press conference.
"If so, that would, in my view, be an error. The damage that has been done by what has been revealed about past malpractice and about the culture that goes with it has been very considerable.
"I don't believe the trust in those who govern us will be restored unless those in authority show leadership and determination in putting the abuses of the past behind them, however uncomfortable that may be."
The proposals will pass to a newly created oversight body, the Independent Parliamentary Standards Authority (IPSA), to be confirmed. MPs do not have a vote on whether to accept the new rules.
All three party leaders, conscious of the overwhelmingly negative public reaction to this year's expenses revelations, moved quickly to express their full support.
Gordon Brown wrote to Kelly to say: "I accept your report. We need to establish a new system to re-establish trust. It is right that this new system is not determined, administered or amended by MPs."
Commons Speaker John Bercow will also urge MPs not to "block, neuter or minimise reform," according to the BBC.
Aside from losing the right to claim for mortgage interest and employ relatives, MPs will lose a host of other privileges once the recommendations are approved.
As mortgage payments are phased out, only rent or hotel costs will be reimbursed in future. Additionally, a pilot scheme will see a commercial agency take over arrangements to provide rented accommodation to all new MPs entering Parliament after the next election.
The current generous resettlement grants, which allowed some senior MPs to receive up to £64,000, will be limited to eight weeks pay.
MPs will have to meet their travel costs themselves, and those who live within 20 miles from Parliament will be denied the right to a second home.
Despite calls from Labour MPs that members of the House should be barred from holding second jobs, Kelly did not recommend this in the report. He did insist that any such activity should remain "transparent" and within "reasonable limits", with information available to voters at election time.
