Sweeping reforms to MPs’ expenses and allowances have been unveiled today with a ban on claiming for mortgages and employing relatives among the measures announced.

It could see two Kent MPs facing up to the prospect of having to sack their wives because they are employed as constituency secretaries.

The proposals, some of which have been widely leaked in recent days, were outlined in detail by Sir Christopher Kelly, whose committee on standards was asked to carry out a review in the wake of the expenses scandal.

There will be a ban on mortgage claims, which will be phased out after a transitional period. Instead MPs will be expected to rent homes or stay in hotel accommodation.

There will also be a ban on MPs’ employing relatives, which will also be gradually phased out.

The Ashford MP Damian Green said he hoped the reforms would enable Parliament to draw a line under the expenses scandal.

“The important thing is that we get on with reforming the system so we can get back to the proper job of representing our constituents rather than worrying about pay and conditions. I am pleased we now have a chairman for IPSA [the independent body that will regulate allowances and pay for MPs] and that it will take all these decisions,” he said.

Generous resettlement grants for MPs who voluntarily step down will also be stopped - but not before the next general election. In future MPs will get eight weeks' pay instead - under the current system some long-serving MPs can get up to £64,000.

Canterbury MP Julian Brazier, who will have to sack his wife Kate after 22 years working as his secretary for two-days a week, said Parliament needed to accept the proposals and move on.

“I think it is a sensible and well-balanced package. The only thing I am sad about is that at the end of the next Parliament, Kate will have to stop working for me. But one has to accept that there has been a number of revelations about MPs’ relatives and I am afraid that spouses and others who have given good value and worked very hard are suffering because the public is understandably very angry.”

“A number of people have abused the system and the rest of us are paying the price.”

Thanet South MP Roger Gale faces having to sack his wife Suzy, who has worked for him in his constituency office for 27 years.

He said: “I don’t think Mr Kelly lives in the real world. We’re being sacrificed on the altar of public opinion. This is civil service populism mixed with party political populism, and it’s a cheap shot.”