Three peers are to be suspended from parliament in the toughest punishment enacted in the House of Lords in modern times after an inquiry found that each had broken expenses rules to wrongly claim tens of thousands of pounds in expenses.

Lady Uddin, Lord Paul and Lord Bhatia face suspension from the house for varying terms and have been ordered to pay back £125,000, £40,000 and £27,000 respectively.

Only two other peers have ever been suspended before and the penalties are the most stringent ever imposed. There will be a vote on Thursday, which is expected to ratify the sanctions.

In the wake of the inquiry, Labour announced it was suspending Uddin, who a spokesman said could face "further disciplinary action", and Paul resigned from the party. Bhatia is a crossbencher.

All three peers were accused of naming properties outside London that they hardly visited as their primary residence in order to designate their London homes as their second property and maximise their expenses.

Each had broken rules to claim the £174 a night allowance for accommodation when they in fact lived within a few miles of Westminster. Uddin and Bhatia were judged to have deliberately broken the rules while Paul breached the rules demonstrating "gross irresponsibility and negligence" but did not act in bad faith.

Uddin and Paul escaped police prosecution when the Lords rewrote the expenses rules earlier this year to clarify that members could designate a property as their primary residence even if they only visited once a month.

An investigation by the Lords sub-committee on members' interests, chaired by the former MI5 boss Lady Manningham-Buller, which is today published by the House of Lords standards and privileges committee along with recommended sanctions, found that:

• Uddin first claimed her brother's flat, then a flat she owned in Kent, as her first home when in fact she rarely stayed away from her main home four miles from central London. The committee rejected Uddin's argument that the two flats had been "bolt-holes" during a troubled period in her marriage, saying a bolt-hole did not constitute a main home. It allowed her to claim £125,349.10 in overnight and travel allowances. She faces an 18-month suspension, which was reduced from three years on appeal.

• Paul, 115th on the Sunday Times rich list, claimed for expenses purposes that his primary residence was a flat in a hotel he owned to claim overnight expenses. He "freely" admitted he had never spent a night there. The report said: "We do not feel justified in finding, on the balance of probabilities, that Lord Paul acted dishonestly or in bad faith. However, his actions were utterly unreasonable, and demonstrated gross irresponsibility and negligence." Paul faces a four-month suspension and has already repaid £41,982.

• Bhatia has lived in a £1.5m family home in Hampton, southwest London, for 20 years, but from 2007 claimed his primary residence was a two-bedroom flat in Reigate, Surrey. Bhatia faces an eight month suspension and has already repaid £27,446.

The reports of the committees were published today, along with transcripts of evidence sessions in which the peers defended themselves and evidence submitted in their favour. A written statement by Lady McDonagh in defence of Uddin accused the committee of showing "little or no cultural understanding of being a Muslim women born outside of the UK".

Lord Strathclyde, the leader of the Lords, said: "I was shocked and appalled by these cases. There was a clear and serious abuse of taxpayers' money. The penalties recommended would be the toughest handed out by the House of Lords."

He added that the rules that allowed the scandal had been scrapped so "bogus" claims could no longer be made.

Police investigations into Uddin's and Paul's expenses were dropped after a Lords committee clarified the rules on expenses in January to allow peers to justify calling a property their main home, even if they had visited it just once a month.