Deputy Prime Minister Nick Clegg has called for major reform to the House of Lords in the wake of allegations of expense abuse against an Essex peer who has already been jailed once over his claims.

A Labour MP has reported Lord Hanningfield to the police over claims that he took £300 daily allowances for work in Parliament while only spending brief periods in the House of Lords chamber.

Echo: Lord Hanningfield outside his home.

Mr Clegg said that the affair was "another blow to people's trust in politics" and vowed to drag the Upper House into the 21st century by fighting for an elected chamber in the Liberal Democrat manifesto for the 2015 general election.

The Lib Dem leader said: "A big part of the problem is that, right now, a place in the House of Lords amounts to a job for life. Unelected peers don't need to seek voters' consent.

"Our Parliament should be the envy of the world: a modern, transparent and democratic institution. Instead it's a relic from the 17th century."

Mr Clegg accepted that the Lib Dems had failed in their drive to secure an elected House of Lords during this Parliament.

But he added: "The British people deserve better. This latest scandal must re-energise our call for change. At the next election, my party's manifesto will once again contain a clear commitment to an elected second chamber."

Lord Hanningfield, who was jailed in 2011 for abuse of expenses, has defended his right regularly to claim parliamentary allowances despite reportedly spending little time in the chamber of the Lords On 11 of the 19 days that the Mirror monitored his movements in July, he spent less than 40 minutes in the Lords after "clocking in" with an official in the chamber before returning to his home in Essex.

The shortest attendance during the month was 21 minutes and the longest more than five hours, with £5,700 claimed in attendance allowance and £471 in travel costs, the newspaper said.

Labour MP John Mann said he was reporting the former Tory peer to the Metropolitan Police for investigation under the 1968 Theft Act.

"Lords can claim either by the half-day or the day," said Mr Mann. "If what has been reported is accurate, he has been doing much less than half-days but claiming for a day.

"If it is true that he has been claiming in the way that has been reported, then it is right and proper that there should be a police investigation into this. The taxpayer would expect no less."

But in a defiant justification of his actions, Lord Hanningfield said the requirement to appear in the chamber is "only a mechanism for paying you" and that failing to speak or vote should not be a bar to receiving the expenses cash.

Most of the money went on "entertaining, meeting people, employing people", he said, claiming that he would "end up with £12,000 a year" for himself which he needs to eat and "pay my electricity bills".

He claimed that half the members of the House were doing the same and that he could name at least 50 peers who did likewise.

Lord Hill, the leader of the upper chamber, expressed "dismay" at the behaviour of Lord Hanningfield, who retained his seat despite being jailed for falsely claiming £28,000 in taxpayer-funded expenses.

There is cross-party agreement on the need to beef up the code of conduct to allow action against "the small number of members whose behaviour falls below the standards we rightly expect", Lord Hill said.

Downing Street said Prime Minister David Cameron shared the dismay and backed the proposed crackdown on those deemed to have brought the House of Lords into disrepute.

It remains unclear whether this will include changing the attendance rules, which Lord Hanningfield did not break, to impose a minimum period that must be spent in Parliament to qualify for the cash.

Members of the House of Lords do not receive a salary, but can claim £300 a day for attendance and "appropriate parliamentary work" at Westminster. They can also opt to receive the reduced rate of £150.

Moves to introduce a sanction of withdrawing financial support and access to facilities from members who breach the code of conduct are due to be brought forward for approval early next year.

Peers jailed for a year or more in future also face being banned, in line with the rules for MPs, after the Government indicated it would support backbench legislation introduced by Tory MP Dan Byles.

"Ultimately the reputation of this House rests in all our hands, which is why I believe noble Lords will want to support steps to strengthen the sanctions available to us," said Lord Hill.

It is important "for us to deal with the small number of members whose behaviour falls below the standards we rightly expect", saying of Lord Hanningfield's behaviour that he is "dismayed about the shadow it casts over the whole House".

A Scotland Yard spokesman said the Met was not aware of Mr Mann's complaint having been received.