MPs who break their code of conduct should face financial penalties, the independent standards watchdog has recommended.

The committee on standards in public life called for a series of reforms in a report published on Thursday following a 10 month inquiry.

Along with the introduction of fines, the committee recommended that the parliamentary commissioner for standards should get the power to demand documents and witnesses.

The two measures were among a raft of recommendations aimed at rebuilding public confidence in the way the Commons conducts its affairs.

Chaired by Sir Nigel Wicks, the committee listed a series of defects in the current regulatory system for MPs and recommended action to ensure the effectiveness of anti-sleaze measures in the Commons.

"We did recommend that the House should take steps to introduce additional financial penalties over sanctions for breaches of the code of conduct," he said.

The committee heard evidence from 64 witnesses and received 70 written responses.

It concluded that the problem of sleaze is not as widespread as the public perceives.

"We believe that standards in the House of Commons are generally high. The overwhelming majority of members seek to and in practice do uphold high standards in propriety," they said.

Wicks said the chief aim of his report was to improve "clarity and transparency" which would help "buttress public confidence".

Currently, MPs found guilty of breaching the code of conduct can be suspended from the Commons. Former ministers Keith Vaz and Geoffrey Robinson were both ordered to apologise and were suspended - Vaz for one month and Robinson for three weeks - for falling foul of the Commons rules.

Under the new proposals the level of fines will be set by MPs.

Preventing witch-hunts and having MP's reputations damaged by false allegations has been a major complaint from MPs and Wicks told ePolitix.com that the committee had tried to solve the problem.

"The commissioner will confine comment to the media that the existance of a complaint does not mean the code has been breached. We have also recommended that if there are frivolous complaints the committee should deal with them quickly, weed them out and say they are frivolous," he said.

He also recommended a red card warning system for consistent complainers.

The report said MPs should be allowed to appoint legal counsel to cross-examine witnesses but there also came a warning that the committee would take a dim view of barristers being used in a bid to stonewall an investigation.

"This is not a matter of complex legal points. The purpose of an investigatory panel is to try, on the basis of the evidence put to it, to come to a judgement on what the facts are and whether the facts constitute a breach of the code," said the chairman.Following the row over the ousting of former standards commissioner Elizabeth Filkin, the report recommended that future appointees should have a non-renewable fixed term appointment.

There was also implicit criticism of the behaviour of the committee on standards and privileges, the body of MPs that rules on the punishment that misbehaving MPs receive.

No one party should have an overall majority on the committee and no parliamentary private secretaries should serve as members, Wicks recommended.

A new investigatory panel with an independent chairman should hear evidence to help the committee decide on the most serious and contested cases.

"This could well be in the circumstances where the parliamentary commissioner believes for some reason he has been unable to get to the bottom of the complaint," said Wicks.

And in future the committee should publish in full its reasons for any decision.

There was also a call for external bodies to be consulted as part of more frequent reviews of the code of conduct for MPs.

"We have prepared our report with twin objectives in mind. They are to ensure a system of regulation in the House which delivers public confidence while carrying the confidence of the House itself," said Wicks.

"We believe that adoption of the measures that we have recommended will enable the House to maintain, and enhance in these challenging times, the highest standards of conduct which are so essential for the institution at the heart of our democracy."

MPs on the committee said the new changes were vital.

Former culture secretary Chris Smith said the committee's authority would be reinforced.

"Any ulitmate decision on whether the code has been breached, how severe that is and what penalties should be is up to the committee," he said.

"It's very important to enshrine the sovereignty of the parliamentary body in the process but to buttress that with as much independence as is possible."

David Heath, the Liberal Democrat member of the committee, welcomed the report.

"It is essential that the system of parliamentary regulation not only works fairly, but is seen to be fair by the outside world," he said.

"Changes, such as removing the government's majority on the standards and privileges committee and ensuring an opposition member chairs the committee, will be significant in ensuring that justice prevails."