Mr Cameron and Lib Dem leader Nick Clegg oppose the PM's plan
The Tories have called for MPs' second home allowances to be replaced by more limited expenses which can only be claimed for accommodation and bills.
The party wants a ban on using taxpayers' money to fund furnishings, TV bills, stamp duty and moving costs.
It is also calling for details of all claims to be published within 28 days, and for MPs who co-habit to be banned from getting double housing expenses.
The government put forward it proposals to reform the system on Tuesday.
The moves follow criticism of MPs' and ministers' use of second homes allowances, worth up to £24,000 a year.
'Grave and favour'
Sir Christopher Kelly, chairman of the Committee on Public Standards, has begun an in-depth investigation into reforming the system, with the findings due by the end of the year.
Both Labour and the Conservatives stress that their proposals are "interim" and necessary because of the scale of public anger.
The Tories say second homes claims should be replaced by a Transparent Parliamentary Allowance from 1 July, to be used only for rent, utility bills, council tax and mortgage interest payments - which would be subject to a cost cap
There should be an immediate ban on ministers in "grace and favour" homes claiming allowance.
The Tories say no MPs living in greater London, or within 20 miles or a "reasonable travel distance" of Westminster, should be allowed to claim the new allowance.
The party also proposes "independent spot-checks and independent audit".
MPs would have to make public declarations about which is their first and second home, "justifying designation" of each and avoiding confusion.
The government has proposed a flat-rate daily allowance for MPs outside greater London attending Parliament, which will be voted on in the Commons next week.
But opposition parties rejected the plan, saying it lacks transparency and could even add to the amounts claimed.
Sir Christopher's inquiry, set up by Prime Minister Gordon Brown, was brought forward after newspaper revelations about the use of second home expenses.
Home Secretary Jacqui Smith and work minister Tony McNulty are being investigated over their claims - but both say they acted within the rules.
Ms Smith has designated her family house in her constituency as her second home - for which she claimed at least £116,000 - rather than the London house she shares with her sister during the week.
Mr McNulty is being investigating for claiming up to £14,000 a year for his constituency home where his parents live in Harrow East.
The issue of MPs' expenses came to prominence last year when it emerged Conservative Derek Conway had overpaid his sons for working as parliamentary researchers.