They will also have to pay capital gains tax when they sell homes bought under the Edinburgh accom­modation allowance.

The new measures are among 13 ­recommendations following an independent review of the Holyrood system by Sir Neil McIntosh in the wake of the Westminster expenses scandal.

There will be an immediate ban on any new appointment of spouses, children and other relatives and a cut-off date of 2015 for the 26 MSPs who currently employ family members to pay them off. Three of the 26, the SNP’s Anne McLaughlin, Labour’s Michael McMahon and the LibDems’ John Farquhar Munro, each employ two family members according to the parliamentary register.

Sir Neil’s report warned that giving politicians public money to employ family members risked undermining public confidence and fuelling “public cynicism”. They will still be able to employ another MSP’s relative as long as this is publicly registered.

Sir Neil’s recommendations, which have been accepted in full by Holyrood bosses, also call for a binding commitment on MSPs who have bought a home in Edinburgh under the allowance system to declare it as a second home and pay capital gains tax when it is sold.

Some MSPs have been able to claim around £10,000 a year in mortgage interest payments under the allowances scheme, which is to be phased out by 2011. Those who sell in the interim still stand to make a profit as there will be no clawback. Sir Neil said it would be neither “appropriate or feasible”.

His recommendations also call for an honesty pledge at the start of each new Parliament committing MSPs to “act in accordance with the principles and rules” of the scheme. His findings would also give the parliament’s corporate body – the group of MSPs and officials who run Holyrood – the power to withhold some of an MSP’s redundancy of up to half of their £56,671 salary for abusing the expenses scheme.

Although he wants the system tightened, Sir Neil, a former chief executive of Strathclyde Regional Council, said the existing rules provided a “sound platform” on which to build public trust. He said: “We have not seen the extremes of the Westminster situation – no gardening, no cleaning, no home furniture, no payments without receipts, no second homes outside Edinburgh but receipted claims subject to audit and all in the public eye.

“It is to the credit of the Parliament that this has been the case and that the scheme has shown itself to be robust.”

Sir Neil said the ban on employing relatives was being proposed not because of any misuse but to maintain public confidence. “From what I have heard, these members of staff are highly committed individuals,” he said.

However, research carried out for

his review revealed distrust of politicians. It found that “confidence was not low” in relation to the expenses scheme itself but was “fairly low in relation to the MSPs”.

Presiding Officer Alex Fergusson said the corporate body intended to accept all the recommendations and Holyrood officials have been ordered to produce a plan for implementing them.

Labour leader Iain Gray said it was a “fair and balanced” report.

SNP group convener Gil Paterson said: “Holyrood has always been the gold standard for accountability and transparency in expenses and it is important we continue to build public trust in MSPs.”

Tory leader Annabel Goldie said: “All Conservative MSPs will fully comply with the new rules.”

A LibDem spokesman said the report was “a step forward”.

An MSP who employs her son said the proposal was a “knee-jerk” reaction to the Westminster expenses scandal.

Sandra White, an SNP list MSP for Glasgow, claimed the proposal may fall foul of human rights legislation.

Ms White said: “I would think some employees may be looking at the human rights area. It’s a case of people being told that because you happen to be a relative of someone, you can’t be employed in that job.”

EXPENSES RULES AT A GLANCE

With immediate effect, parliamentary funds should no longer be accessible to pay for any new appointment by an MSP of family members. Existing family can be funded until July 2015. Where an MSP employs family of another MSP, the arrangement should be registered.

MSPs who get mortgage support must provide a binding commitment that when property is sold, it is declared as a second home and will be subject to capital gains tax. When house is “flipped”, liability for capital gains tax remains.

From 2011, existing expenses for items such as council tax and water charges for MSPs who lease accommodation will also apply to MSPs with Edinburgh accommodation at own expense.

Financial limit for MSPs who share accommodation in Edinburgh should be for one individual plus one-third.

MSPs to sign an agreement before every parliamentary session committing them to act in accordance within rules of the expenses scheme.

“Appropriate” number of expenses claims to be reviewed by internal audit.

Part or all of resettlement grants to be withheld when MSP has breached scheme.