The Independent Parliamentary Standards Authority (Ipsa) will unveil its final proposals next week – including boosting MPs’ salaries to £74,000 from 2015 – 11% higher than they get at present.
It is expected to try to temper criticism by announcing a tougher-than-expected squeeze on MPs’ pensions in a bid to cancel out the £4.6 million cost to the public purse.
A £2.5 million saving by downgrading the final salary scheme to career average – matching the rest of the public sector – had already been proposed alongside a crackdown on various perks.
All three main party leaders have condemned the increase at a time of national austerity, with both Labour’s Ed Miliband and Liberal Democrat Nick Clegg pledged to shun the extra money.
David Cameron has stopped short of matching that pledge – and is under pressure from some Tory MPs to back the increase – but has said Westminster pay should not rise while others face restraint.
However, following a consultation on the proposals – first set out in July – Ipsa is set to press ahead.
And MPs have no way to prevent the rise coming into force after the next general election – unless they change the law set up in the wake of the expenses scandal to stop them setting their own pay.
Research by Ipsa found that two-thirds of MPs believe they are underpaid and the watchdog’s chairman Sir Ian Kennedy has insisted politicians’ pay must “catch up” after years of being suppressed.
But many politicians are also furious at Ipsa’s expenses regime and suggested they could back a move to strip it of the responsibility to set pay in order to destroy its authority.
A Conservative source said Mr Cameron had been “clear that we are committed to reducing the cost of politics” and that the Prime Minister had consistently called for “restraint” in MPs’ pay.
A Labour source said: “We will obviously wait to see what the final proposals are, however, as we have always said, any rise in MPs’ pay must be considered in the light of the current economic climate and the cost-of-living crisis facing people across the country.
“It must also be seen in the context of the decision to limit or freeze many workers’ pay increases in both the public and private sectors.”
Commons deputy speaker Lindsay Hoyle, a Labour MP, cautioned against interfering with the system.
“I agree that MPs should not vote on their own pay,” he told the Mail on Sunday. “It should be left to an independent body. It’s not in the gift of the party leaders.”
In July, Mr Miliband predicted that Ipsa would drop the significant rise, but added: “I f this was to go ahead I wouldn’t be accepting this pay rise.”
Mr Clegg said then that it was the “worst time” to advocate a double-digit pay rise.
Ipsa’s original report conceded there is no “compelling evidence” that MPs’ current salary level is deterring candidates, making people leave Parliament, affecting the diversity of the House or lowering the standard of ministers.
But Sir Ian argued it was “wrong in itself” to keep MP pay low, arguing that the expenses scandal had been the result of too much restraint.
Ipsa said it had looked at increasing the current salary of £66,396 to anywhere between £73,365 and £83,430, but opted for the lower end “in recognition of the current difficult economic circumstances”.
After 2015 wages would increase annually in line with average UK earnings.
Among measures already on the table to offset the cost of the rise – which is 9% higher than the rate MPs will be on by 2015 – was an end to ” resettlement grants” of up to £65,000 for departing MPs.
Under the plans that would be reduced to two weeks’ pay for every year of service if they are under 41, and three weeks if they are older by 2020.
A £15 dinner allowance would be scrapped, claims for tea and biscuits would not be allowed, and taxpayer-funded taxis home only allowed after 11pm.
There would also be a crackdown on claims for running second homes, with costs such as TV licences and contents insurance no longer being met.
Mathew Sinclair, chief executive of the TaxPayers’ Alliance campaign group, said: “Taxpayers will be furious that the pay rise comes at a time when MPs urge public pay restraint and the Chancellor tells us he can’t afford to ease the burden of taxes on hard-pressed households and businesses.
“Ipsa’s own polling and research shows that the current level of pay to be broadly fair and that the public simply do not back the increase.
“This announcement amounts to an unaccountable quango putting up two fingers to taxpayers. The rise must be rejected.”
A Downing Street spokesman said: “MPs’ pay is a matter for Ipsa. The Government has submitted its views to Ipsa as part of the body’s consultation on MPs’ pay.
“It made it clear that, while Ipsa is an independent body set up by Parliament, in future decisions on remuneration it expects Ipsa to take into account the Government’s wider approach to public service pay and pensions.
“We believe that the cost of politics should be going down, not up.”