Lord Chancellor Jack Straw is planning to make changes
Peers guilty of a criminal offence or rule breach could be kicked out of the Lords, under plans being considered by Justice Secretary Jack Straw.
Currently the heaviest punishment they face is being ordered to apologise.
The move follows the row over claims some Labour peers were prepared to accept money to change legislation. They all deny any wrongdoing.
The Tories and Liberal Democrats both back moves to expel peers who have broken the law.
Mr Straw, who is working on wider reform of the House of Lords for inclusion in Labour's next manifesto, indicated to the BBC that measures to allow for the expulsion of peers could be introduced before the next general election.
He said the accusations, although they had yet to be substantiated, had damaged not only the Lords but Parliament as a whole, and he wanted to accelerate change.
But he played down press reports that any law would apply retrospectively and lead to the expulsion of Lord Archer, who served four year jail sentence for perjury and perverting the course of justice, and Lord Black, who was jailed in the US for fraud.
"We would certainly pass a law to ensure that if you've been convicted of a serious criminal offence then you couldn't continue to sit in the House of Lords," he told the BBC Radio 4's The World This Weekend.
"There is a separate issue about whether any change in the law which is adverse to individuals could or should apply retrospectively.
"So leave aside those individuals who have indeed been convicted of serious offences in the past, but I think the public and indeed Parliament expects that if a member of the House of Lords is convicted of an offence, he or she ought to be expelled from the Lords."
He said the government was also looking at expulsion "where there is grossly improper conduct, which however did not involve criminal conviction".
He said he was also looking at legislation to allow peers to resign - at the moment they are members of the House for life and can not step down.
"If you had simply provision at the moment for peers to resign then I think quite a number of those previously convicted would have resigned, and those who face these allegations may, as often is the case in business, for example, have been placed in a position in due course where they had no alternative but honourably to resign, so that change in itself would make a big difference."
He insisted he was not trying to turn the reforms into a party political issue, adding "the problem of undue influence affects particularly the governing party, whether it's the Conservative or the Labour Party".
He said: "The days of an appointed chamber where members sit there for life and lack any kind of proper accountability are over."
The days of an appointed chamber where members sit there for life and lack any kind of proper accountability are over
Mr Straw was also tackled about his links with Lord Taylor, one of the four Labour peers at the centre of the cash-for-influence row, who is a former council leader in the MP's Blackburn constituency.
In 2004, Lord Taylor arranged a £3,000 donation to Mr Straw's campaign funds from US company Canatxx Energy Ventures, one of the firms he represents, which was bidding to build a gas storage facility close to the MP's constituency. Mr Straw was censured by the Commons standards and privileges committee earlier this year over the late declaration of the donation.
He told BBC News: "For the avoidance of doubt, I have absolutely nothing whatever to do with any business dealings of his (Lord Taylor) at all, apart from a donation from one of the companies he represents made to a 25th anniversary party I held five years ago but I know nothing else about the company and have had no dealings with them."
The Conservatives are calling for the swift introduction of new punishments for Lords who have broken the rules.
Shadow Lords leader Lord Strathclyde said: "This stains the whole of the House of Lords. We do not have a regime of sanctions which comes up to public scrutiny. That's what we've got to deal with."
Shadow business secretary Kenneth Clarke told the Politics Show in the East Midlands: "We should introduce the power to suspend or expel members of the House of Lords. It could be done next week."
Last week the Sunday Times reported that four Labour peers, Lord Moonie, Lord Truscott, Lord Taylor of Blackburn and Lord Snape - had discussed changing legislation in return for a fee with undercover reporters posing as lobbyists.
Let's not be so restrictive that we stop talented people coming into politics
The men all deny breaking Parliamentary rules and the police have not yet decided whether to launch an investigation.
A House of Lords committee is investigating the claims, which have raised concerns across the political spectrum.
In a separate development, The Sunday Telegraph reports that Commons Leader Harriet Harman is considering restrictions on outside earnings for MPs.
This would include an outright ban on other jobs, limiting additional earnings to 15% of parliamentary salary, or a partial ban that would rule out paid directorships, but leave MPs able to do other jobs - such as practising as a doctor, the newspaper reports.
MPs can draw a basic £63,000 salary and additional expenses.
Shadow Foreign Secretary William Hague, whose outside interests make him one of the Commons' biggest earners, said ministers were trying to "hide their embarrassment" about the cash-for-influence row with "reheated" old proposals for reform at Westminster.
He told BBC1's Andrew Marr Show: "If the government comes up with other proposals on reforming Parliament then, of course, we must look at those proposals.
"In principle, I would say let's not be so restrictive that we stop talented people coming into and staying in politics, because we are not so overflowing with talent - in any party - that we can do without those people.
"But don't let the government off the hook here. Irrespective of any future rules, the allegations made about these peers in the last week involve breaking rules that Parliament has had for centuries that financial inducements to change legislation are not allowed."
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