Tory MEPs in the European parliament will have to publish their expenses and state whether they have any family members on the payroll, under new guidelines announced by David Cameron.
Mr Cameron said "recent months have revealed a series of loopholes" and "inadequate controls" in the European system, referring, presumably, to controversies involving Giles Chichester, the party's leader in Europe.
Under the proposals, the use of service companies would be outlawed, any family members assisting the MEPs with their work will have to have their names and salaries published and all bonuses will have to remain below 15 per cent of the individual's annual salary.
A 'right to know' form will need to be published twice a year. An outline of allowances used will have to be published on the delegation website. A compliance officer will be appointed to report to the chairman of the delegation and Mr Cameron's head of compliance.
Announcing the draft code, Mr Cameron said arrangements for transparency and employing relatives "are all in our view inadequate".
"This is unacceptable," he added.
MEP expenses have long been a source of irritation to Westminster politicians who look at levels of European expenditure with disbelief given the level of scrutiny the UK press puts them under.
But the forced resignation of Mr Chichester put the media spotlight on the European system.
Under the current system ?270 (£215) a day is allocated for restaurants and hotels, although MEPs do not have to explain how often they take advantage of the allowance or what for. ?4,000 (£3,183) is available for general expenses. The new rules will come into force in June 2009.
Matthew Elliott, Chief Executive of the TaxPayers' Alliance, said: "The gravy train culture in the European parliament is far worse than that in Westminster, and it is high time that the stables were washed clean.
"It's good news that David Cameron is introducing proper auditing and improved transparency."