THE Prime Minister plans to replace allowances for MP's second homes with a flat-rate daily Parliament attendence payment.

The news comes after Leyton and Wanstead MP Harry Cohen faces an investigation over whether he broke expenses rules.

The complaint centres around allegations that Mr Cohen used his second home allowance to claim for his main home.

Mr Cohen denies any wrong doing.

The inquiry, by Parliamentary Commissioner, John Lyon, comes after a complaint by a member of the public, it has been reported.

Under Gordon Brown's proposals MPs would not be able to directly employ staff.

Instead, the House of Commons will arrange contracts and salaries.

MPs will also receive a flat rate payment based on their attendance in the House of Commons.

It is not known how much this will be but it would be set by the independent Senior Salaries Review Body.

Ministers will no longer be able to claim for the new allowance for living in 'grace-and-favour' homes.

Nor would MPs with consituencies within a 'reasonable' distance from Westminster be entitled to claim the inner London suppliment worth £7,500 per year.

Mr Brown's plans have been welcomed by the Conservatives and Liberal Democrats but concerns have been expressed about an allowance for MPs 'turning up to do their jobs.'

It was recently revealed that Mr Cohen claims more expenses for his second home than any other MP in outer London.

He received an Additional Cost Allowance of £104,701 between 2002 and 2007 for his constituency home in Wanstead.

Mr Cohen declares his main family home to be in Colchester, Essex.

The MP attracted controversy recently when he wrote a letter to the Guardian claiming: "I am almost certainly the most professional MP Leyton and Wanstead has ever had, and that includes Winston Churchill."