Brown pledges clean-up after scandal

By Christina Fincher

LONDON (Reuters) - Prime Minister Gordon Brown promised radical reform of the political system on Sunday after disclosures of MPs' perks sent his Labour party crashing to an historic low in opinion polls.

The Labour party faces a difficult test in local and European elections this week and speculation is mounting over Brown's political future.

Two weekend polls suggested Labour could slip to third place in Thursday's European Parliament election.

In a bid to regain the initiative and re-assert his authority, Brown said he planned to introduce a binding code of conduct for politicians, who would be punished if they were found to have abused the system of parliamentary allowances.

He warned other public institutions they also would face tougher, independent scrutiny in a wide-ranging clean-up operation.

He told the BBC's Andrew Marr programme he had been "shocked" by the abuses that had been uncovered.

"To be honest, what I've seen offends my Presbyterian conscience. What I've seen is something that is appalling," he said. "There are clear cases which may have to be answered for fraud."

Brown said members of parliament would have their receipts for the past four years examined by an independent body and pledged to bring in a "transparent democracy" where all these things were above board.