The blueprint for House of Lords reform will be published "within days" and will lead to hundreds of peers losing their seats.

The Joint Committee on Lords Reform, which was appointed to consider a model for the second chamber, will recommend a range of options in the new year. MPs will be given a choice ranging from an upper house with all of its members elected to one with all of its members appointed. Other options will include a chamber comprising 80 per cent elected and 20 per cent appointed members, and one with a 40:60 ratio.

The report will point out the implications of such reforms, with up to 570 peers losing their seats; 89 hereditary peers are likely to lose their seats unless they are elected or appointed.

Peers are unlikely to be forced out but might get pay-offs of up to £50,000 each. The options are due to be voted on by Parliament next month. The committee will then review how much compensation peers should get in greater detail.