MPs and expenses: the final damning verdict

The reputation of British politicians will receive a fresh body blow today as the Commons expenses auditor accuses them of deliberately creating a culture of dishonesty at Westminster.

Sir Thomas Legg, who has scrutinised the claims of more than 700 politicians over five years, will order 350 of them to repay up to £1m of public money as he publishes details of his trawl through their expenses. His scathing comments, contained in a foreword to his report, will put him on a collision course with backbenchers livid over being forced to return so much cash.

The Independent has learnt that Sir Thomas has concluded that MPs – and not Commons officials – should shoulder the blame for the expenses scandal that convulsed Westminster last year. He will acknowledge that a "culture of deference" developed at the Commons fees office which meant officials rarely challenged or refused MPs' claims.

But he will target his anger at politicians of all parties for not only tolerating expenses fiddles, but "knowingly" encouraging an allowances system that enabled MPs of all parties to line their pockets. Sir Thomas will today publish details of the individual payments that MPs will be expected to return to the taxpayer.

They will be instructed to pay the money back within weeks – or have the cash deducted from their salaries or severance payments at the election.

His strongly worded comments will intensify many MPs' hostility to the auditor. There have been widespread protests that Sir Thomas took far too tough an approach to examining their claims as they were only following the rules in force at the time.

Several MPs have had their repayment demands slashed, or even cancelled, after about 75 of them put their case to Sir Paul Kennedy, the senior judge who has been considering appeals. But Sir Thomas will dismiss the argument that MPs were complying with the existing rules as he announces that almost half of the current and former MPs whose claims he has examined will have to pay back money.

His report was still being finalised last night as MPs submitted last-minute paperwork to him. Commons sources confirmed he had concluded that around 350 MPs would have to return a total close to £1m. Among them is Gordon Brown, who was hit by a demand for £12,415, including £10,716 for cleaning. David Cameron has returned £680.

The largest repayment is expected to be made by Bernard Jenkin, the former Tory frontbencher, who has been told to return the £36,250 that he claimed for rent payments to his sister-in-law. He had been instructed by Sir Thomas to give back £63,250, but the amount was reduced after he appealed against the ruling.

Details of MPs' repayment demands will be published alongside new figures for their claims for travel and office expenses in 2008-09. Information will also be released about bookings of Commons rooms by MPs over the last five years for public and private organisations.

Sir Thomas, a retired civil servant, was appointed in October to head a panel re-examining every expense claim for the second homes allowance submitted by MPs over five years. His tough interpretation of what was permissible – including laying down cash limits on what MPs should have claimed for services including cleaning and gardening – caused resentment among backbenchers. Their anger will be fuelled by comments today by Sir Paul, who is expected to criticise Sir Thomas's decision to impose retrospective rules and to dismiss the idea that MPs should be punished now because their claims were deemed to be "tainted".

Leaders of the major parties, who all experienced the anger of voters at last year's local and European elections, are anxious that the Legg report will draw a line under the expenses controversy and have urged their MPs to accept his rulings. The Prime Minister's spokesman said yesterday: "He feels very strongly it is time to move on to the new system."

But controversy over the issue will continue for months as Sir Ian Kennedy, the new parliamentary regulator, works on details of the new expenses regime. The aim is to announce the new system by mid-March, by which time the parties will have selected almost all of their general election candidates, and to have it in place by mid-May.

He is expected to approve a call from Sir Christopher Kelly, chairman of the Committee on Standards in Public Life, for MPs to be banned from employing relatives within five years. MPs whose constituencies are within London's public transport network will be banned from claiming for second homes.

Sir Ian is also set to rule that MPs who retire voluntarily, rather than lose their seats at an election, should no longer be entitled to taxpayer-funded "golden goodbyes".

Timeline: Shadow over Westminster

8 May 2009 The Daily Telegraph prints the first in a series of extracts from leaked computer discs containing details of MPs' second home claims.

19 May Michael Martin announces he will stand down as Speaker and unveils new interim rules on allowances.

27 May A Labour "star chamber" disciplinary panel begins considering cases against MPs.

18 June Expenses claims are published, but many crucial details are blacked out.

19 June Scotland Yard announces it is investigating a small number of MPs and peers.

23 June The Parliamentary Standards Bill is published and rushed into law in a month. It removes MPs' right to set their own allowances.

25 June An internal inquiry into Conservative MPs' claims leads to the repayment of £125,000.

12 October The auditor, Sir Thomas Legg, sends letters to MPs, spelling out how much he expects them to repay. Gordon Brown repays more than £12,000.

3 November Sir Ian Kennedy is appointed chairman of the Independent Parliamentary Standards Authority.

4 November Committee on Standards in Public Life, headed by Sir Christopher Kelly, concludes MPs should not be able to claim for mortgage interest, "golden goodbyes" should be slashed, and MPs should be banned from employing relatives.

10 December Hundreds of thousands more receipts from claims in 2008-9 are published.

17 December Up to 80 MPs say they will appeal against Sir Thomas's repayment demands, with former Appeal Court Judge Sir Paul Kennedy to make the final decision.

January 2010 MPs learn the results of their appeals. Many say their repayment orders have been overturned or cut.