Civil servants would be prevented from cashing in with unauthorised exposes of their time in the corridors of power under rules proposed by MPs.
Sir Christopher Meyer's memoirs sparked the investigation
The public administration committee says memoirs by top diplomats and civil servants often have "real value".
But financial incentives to produce "shocking" or indiscreet revelations should be removed.
New recruits should be forced to sign away copyright of unauthorised future works to the Crown, the MPs say.
Ministers and civil servants would have to clear any publications with the authorities as they do now.
But the procedures should be much clearer and if civil servants publish without prior clearance, the government would be allowed to seek the profits.
Ministers would be treated differently because they "do not have a contractual relationship with the government".
But the report adds: "A duty to sign a formal commitment to consult before publication should be placed clearly and specifically in the Ministerial Code."
The MPs' investigation was triggered by the publication last year of DC Confidential - the memoirs of Sir Christopher Meyer.
Sir Christopher ridiculed serving politicians as political "pygmies" and said then Foreign Secretary Jack Straw "took a long time to find his feet".
The former ambassador was strongly criticised by the Commons public administration committee in December, which accused him of damaging the trust between ministers and civil servants.
The committee chairman, Labour's Tony Wright, claimed government was being undermined by such "instant memoirs".
A book by former Downing Street spin doctor Lance Price was also singled out for criticism.
The report stresses the value of memoirs and says there should be a "presumption in favour of publication" but with clear and agreed restrictions.
It says the public interest in openness and transparency has to be balanced against the protection of a space within government for frank discussion and advice.
There have to be clear guidelines, with common principles but different applications to ministers, civil servants and special advisers.
Mr Wright said: "Nothing in this report will prevent memoirs being published. They have a real value and should be encouraged.
"But it needs to be clear what the rules are in order to protect those matters that genuinely need protection, and a fair process to deal with disagreements.
"We believe that our proposals will help to avoid the kind of difficulties we have seen recently, and give more certainty both to memoir-writers and to governments."