The honours system is outdated and secretive and needs overhauling, an influential committee of MPs says.
The OBE "should be renamed"
Civil servants, diplomats and the armed forces are unfairly favoured, they say.
In a hard-hitting report, they say the Order of the British Empire is now inappropriate and should be replaced by an Order of British Excellence.
Knighthoods and damehoods are "redolent of past preoccupations with rank and class", the MPs argue, recommending they should also be phased out.
The report by the Public Administration Committee, entitled A Matter of Honour: Reforming Our Honours System, also says the machinery for making recommendations for honours lacks independence and rewards too few outsiders.
The use of honours as the tools of political management by Number 10 casts suspicion on the whole system, it says, although the MPs find little if any evidence of "serious corruption".
"There was special concern about the use of honours as the 'lubricant of the
state' and some scepticism at the claims of those who run the system that it is
entirely based on merit," says the report.
Tony Wright wants the government to be bold in reforms
"The regular conferral of knighthoods on MPs is sometimes viewed, cynically, as a mere tool of political party management."
The MPs are worried that women and people from the ethnic minorities appear to get fewer honours than their white male counterparts.
They want "indicative targets" for honours which reflect Britain's diversity.
The report says "automatic honours" for senior civil servants and diplomats simply for doing their job "create a sense of unfairness and undermine the credibility of the system".
The proposed changes would mean there would be only four national honours, instead of the current 16.
The MPs say: "The title 'Order of the British Empire' was now considered to be
unacceptable, being thought to embody values that are no longer shared by many
of the country's population."
The new Order of British Excellence should as far as possible have the same three levels of Member, Officer and Commander as the current award, keeping the old
initials of MBE, OBE and CBE.
A new Honours Commission should also be set up to remove civil servants from decision making on honours, say the MPs.
Mr Wright said: "Honours are a way for the nation to recognise service and achievement.
"In our view, the system now needs radical and systematic reform, which our recommendations are designed to achieve.
"These are bold proposals, and we hope the government will be equally bold in its response to them."
The government is running its own internal review of the honours system which is expected to be published this week but will consider the appointments process, not the awards themselves.
The government will have to respond formally to both reports.
Constitutional expert Lord St John of Fawsley branded the MPs' proposals as "absurd", saying that everybody knew the British Empire no longer existed.
He said: "We would be cutting ourselves off from a system which is understood by the
people. It would create confusion."
Novelist JG Ballard, who refused a CBE, said there should be fewer honours, reserved for those who really deserved them.
He told BBC Radio 4's World At One: "I just cannot accept the whole system of an antiquated title, this sort of world of gongs and medals and ribbons that really belong on a Christmas tree."
But Conservative frontbencher Alan Duncan said: "People like the colour and tradition of the honours system. These proposals would make them bland and boring."