PRIME Minister David Cameron has said an 11 per cent pay rise is "unacceptable" and even suggested he might scrap the parliamentary watchdog if it did not reconsider its recommendation for the hike.
Speaking at Prime Minister's Questions in the House of Commons today, Mr Cameron warned that if the Independent Parliamentary Standards Authority (Ipsa) forged ahead with its plans for the increase he was "ruling nothing out".
Responding to a question from Labour Leader Ed Miliband in the Commons, Mr Cameron said: "I think it would be wrong for MPs to get a big pay rise at a time of public sector pay restraint. All three party leaders agree on that, we have all made that point to Ipsa.
"I think we should be clear that what they have said is not a final recommendation.
"Let me briefly make three points. First, the idea of an 11 per cent pay rise in one year at a time of pay restraint is simply unacceptable.
"Secondly, Ipsa do need to think again and unless they do so, I don't think anyone will want to rule anything out.
"No-one wants to go back to MPs voting on their own pay but we have got to have a process and an outcome that can build public confidence.
"Third, in my view, I think this should all be accompanied with a cut in the cost of politics."
Mr Miliband, who has called for cross-party talks on how to respond to the proposals, said it would be wrong for MPs to receive a pay rise many times the rate of inflation, while ordinary families faced a "crisis in their living standards".
He asked the Prime Minister to "agree with me that we should not let this hang around as an issue until after the general election, hanging over the trust in politics".
"Waiting and seeing won't work and we do have to get together to deal with this," the Labour Leader said.
"The reason why this is not the right time for this pay rise is because most people are going through the biggest cost of living crisis in a generation."
Ipsa is expected to recommend on Thursday that MPs' pay increases by £7,600 to £74,000. The rise would come into effect in May 2015.
Labour has accused Mr Cameron of kicking the issue into the long grass and called for immediate cross-party talks.
Party sources said they want urgent talks involving IPSA head Sir Ian Kennedy, Mr Cameron, Deputy PM Nick Clegg and Mr Miliband.
But Downing Street played down the prospect of any imminent action.
No final decision on MPs' pay is due until the middle of 2015, after the next general election, Mr Cameron's spokesman told reporters after Prime Minister's questions.
"There is a process, let the process run its course," he added.
Many backbenchers have criticised the planned pay rise but others, including former Labour foreign secretary Jack Straw, have warned that defying IPSA over the issue will threaten the watchdog's future and give the impression Parliament wants to set its own pay and expenses again.
IPSA was established in the wake of the MPs' expenses scandal, and is charged with administering and regulating MPs' expenses.
It was also tasked with setting MPs' salary levels independently of Parliament and government to end the conflict of interest that had been attached to MPs having the final say on their own pay.
