David Beckham, with wife Victoria, collects his OBE
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The way recipients of honours are selected is under review, the Cabinet Office has confirmed.
The changes being considered will aim to make the process more transparent and independent, and less elitist.
Ministers were forced on the defensive after it emerged a scientist was blocked from being honoured because of his support for animal experiments.
Other leaks suggested tennis player Tim Henman was considered for an honour to "add interest".
A committee of MPs has already announced plans to hold an inquiry into the honours system early in 2004.
'Old Boys'
Thee structure and composition of the committees which decide on recipients of honours will be reviewed.
Tony Wright, chairman of the Commons Public Administration Committee, which is to inquire into the system, said: "We need to have an honours system which people believe is credible."
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Anyone can now nominate anyone else (or even themselves) for an honour.
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Although it is the Queen who officially bestows the honours, it is based on recommendations from the prime minister, who in turn gets the names from civil servants in the Cabinet Office's ceremonial secretariat.
They sift through thousands of nominations from organisations, politicians and the public to decide who gets honours such as CBEs, OBEs or knighthoods.
But the way they decide has always been closely guarded - even the names of the people who make the decisions have been shrouded in secrecy.
Animal research
Calls for the system to be changed have mounted since documents leaked to the Sunday Times revealed Colin Blakemore, head of the Medical Research Council, was not put forward for an honour because of his support for animal experiments.
Prof Blakemore told BBC Radio 4's Today programme: "I take it to mean because I have been willing to engage publicly on that very sensitive but very important issue [my name was blocked]."
Mr Wright, whose committee will now include the leaks in their inquiry into the honours system, said: "The fact is that we have an honours system that is wholly secretive, run by senior civil servants."
He added that because fundamental questions were not asked about "what it is which is being honoured... we have these kind of eruptions every time we get a leak or where there's a dodgy name."
The Cabinet Office says it is already reviewing the process following the delayed publication last month of the Wilson review of the system, a review commissioned by John Major when he was prime minister.
The review found the 54 members of the committees which recommend people for honours were 85% male, 96% white and with an average age of 60.
The review suggested there should be people from outside the civil service included on the committees to decide on who was nominated.