Australian political strategist is reportedly set for place in New Year honours list after running Tories’ 2015 election campaign

David Cameron has been accused of undermining the honours system after it emerged that Lynton Crosby, the political strategist who ran the Conservatives’ election campaign, is set to get a knighthood in the New Year honours list.

Tory MPs welcomed the decision, which marks a significant escalation of the policy Cameron has adopted of allowing honours to be awarded for political service.

The Labour MP Mary Creagh criticised the appointment on Twitter, while Paul Flynn, another Labour MP, said he was pleased about the news because it would discredit the honours system, which he has long opposed.

Flynn, a member of the public administration and constitutional affairs committee, said: “I welcome this appointment because it will drive the honours system into deeper disrepute. The more it is abused, the more people will come to regard it as at best arbitrary, and at worst corrupt.”

The Labour MP John Mann said giving a knighthood to Crosby was “degrading” to the honours system and “an insult to the country’s heroes”.

Ukip’s Jonathan Arnott also condemned the decision.

But the Conservative MP Glyn Davies said Crosby had made a “massive contribution to UK politics” that deserved recognition. Fellow Tory Bernard Jenkin, the chair of the public administration and constitutional affairs committee, said knighthoods such as this were “not simply in the gift of the prime minister” because they have to be approved by the committee overseeing parliamentary and political honours.

“Should people in politics not get an honour just because they give public service through politics?” he asked. “I think that question answers itself.”

The Guardian view on David Cameron’s new peers: government of the club, by the club, for the club | Editorial Read more

Jenkin also claimed that some of the worst abuses of the honours system took place under Labour, citing the so-called lavender list drawn up by Harold Wilson when he resigned as prime minister in 1976. Jenkin said the system is now much cleaner because there is proper oversight of honours.

Crosby’s knighthood has not yet been officially announced, but sources familiar with the honours list effectively confirmed that Crosby would be recognised when the full names are revealed on Thursday, following reports in the Sunday Times.

Honours for political service were supposed to be banned after Tony Blair took office in 1997, although in practice some MPs continued to receive knighthoods on the grounds that they are being rewarded for their contribution to parliament.

Cameron has been a lavish dispenser of patronage – he even included his barber, Raffaele Claudio Carbosiero, in an honours list two years ago “for services to hairdressing” – and he has revived the idea of granting honours to people explicitly for political service.

One Conservative source said it might be hard for Labour to complain about the Crosby honour because Spencer Livermore, who ran Ed Miliband’s election campaign, received a peerage in the dissolution honours list, even though he lost the election in May and Crosby won.

Peerages are a means of creating working peers. The link between peerages and honours is supposed to have been broken, although that distinction is lost on the many people who continue to donate to political parties in the hope of elevation to the upper house.

Crosby’s knighthood is likely to prove controversial not only because he is a foreign political consultant receiving a high-profile honour, but because his uncompromising tactics have previously appalled some of his opponents.

Having made his name in Australia, where he worked for the right-of-centre Liberal party and masterminded election victories for John Howard, Crosby first played a major role in the UK when he ran the Conservative party’s election campaign in 2005, under Michael Howard’s leadership.

Crosby approved hard-hitting campaign slogans, including one saying “it’s not racist to impose limits on immigration”, which at the time led to the accusation that he was engaged in “dog whistle” politics by making a covert appeal to racist views.

Lynton Crosby: the man who really won the election for the Tories Read more

The Tories lost in 2005, but Crosby, who was brought in relatively late, was not blamed and, after running Boris Johnson’s two successful London mayoral campaigns, he was hired by Cameron and George Osborne to take overall command of the 2015 general election campaign.

Most of those involved in the campaign speak very highly of his contribution, in particular his ability to impose message discipline on the party, and his decision to focus heavily on winning Liberal Democrat seats in the south-west of England, some of which were considered impregnable, but eventually fell to the Tories.