There have been widespread calls for reform of the system
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Docking the wages of MPs who break the rules on expenses is a "good suggestion", David Cameron has said.
The Conservative leader agreed with a caller to BBC Radio 5 Live who argued wages could be docked by 10 to 20%.
Mr Cameron also suggested MPs could be banned from the Commons for a period if they abused the system.
Prime Minister Gordon Brown has ordered a review of expenses to be speeded-up amid growing public anger but Mr Cameron has called for action now.
Mr Cameron said he was ready to meet the other party leaders to make progress on scrapping the controversial second homes allowance.
One option, he said, was to "have a proper declaration by MPs about why they need this allowance and where they live and all the rest of it, so that there isn't any of this monkey business about pretending a second home isn't a second home".
'Children's charity'
The other option was to replace the allowance with a "sum of money" that costs less than under the current system.
He added: "I just want us to sort this out. I think our politics is being dragged through the mud. It's not just bad for the House of Commons, but I think it's bad for the country and we just need to sort this out."
MPs can already be made to pay back any expenses they wrongly claim.
But asked by a listener if he thought they should also be docked "say 10, 20% on top of that" with the money "given to help the country get out of recession or to a children's charity" Mr Cameron said: "I think that's a very good suggestion."
He added: "Where MPs have been found to misuse their expenses they have been made to pay back the money, I think that's right. The idea of getting them to pay back some more is a very good suggestion."
Expenses review
On Wednesday, Gordon Brown agreed to meet Mr Cameron and Lib Dem leader Nick Clegg to discuss MPs expenses.
The prime minister told MPs: "This whole system has to be reformed and improved.
"I think there is common ground in this House that it brings no repute to MPs if we are continually having to deal with these issues."
But he said any reforms would still have to wait for the outcome of a review by the Committee on Standards in Public Life.
The review has been speeded up amid public anger about the scale of expenses being claimed by MPs and ministers.
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