The reforms were proposed after the recent expenses revelations
Measures to reform Parliament after the expenses scandal could violate MPs' human rights, it has been claimed.
The right of MPs to a fair hearing if accused of misconduct could be violated under a planned new system of external regulation, MPs and peers have warned.
The Joint Parliamentary Committee on Human Rights urged greater safeguards.
MPs are debating reform plans for a second day as ministers seek to get new laws passed before Parliament breaks up for its summer recess on 21 July.
Right of appeal
On Monday the Parliamentary Standards Bill passed its first Commons hurdle despite widespread concerns that the legislation was being unduly rushed through Parliament.
Ministers made concessions, including ditching a clause to make the MPs' code of conduct legally binding and rethinking requirements on the declaration of financial interests, but argue "swift progress" on the bill is needed.
Tuesday's debate focused on the new Independent Parliamentary Standards Authority (IPSA) - which will oversee a new allowances system and authorise claims - and the Commissioner for Parliamentary Investigations who will investigate MPs accused of abusing the system.
Controversially, the legislation will introduce three new criminal offences for MPs who break the rules, one carrying a potential jail sentence of up to a year.
Some Tory MPs say these offences are superfluous as existing laws covering such offences already exist and carry far tougher sentences.
The Joint Committee on Human Rights said the institutional set-up being proposed threatened MPs' rights under the European Convention of Human Rights.
If the bill was to meet minimum legal requirements under the Convention, it said it must guarantee that MPs accused of misconduct had access to legal advice throughout their hearing, the opportunity to call and examine witnesses and the right of appeal to another independent body.
Such safeguards must be explicitly stated in the law, the committee argued.
"It is ironic that a bill which is primarily designed to restore public confidence in the House of Commons is being rushed through Parliament and will not receive proper scrutiny," said Labour MP Andrew Dismore, the committee chairman.
"We are clear that if the bill is passed as it stands, it will only be a matter of time before the European Court of Human Rights finds a violation of a member's right to a fair hearing."
During the debate, several MPs complained about the naming and composition of the new Authority and whether the new Commissioner would duplicate the work of the existing Parliamentary Standards Commissioner.
Shadow Justice Secretary Dominic Grieve said this could lead to "future conflict" while Labour MP Denis MacShane said the role of Commissioner for Investigations sounded "sinister" and complained the whole bill lacked "clarity".
Other MPs queried the point of setting up the body before Sir Christopher Kelly's independent committee reports on its recommendations to reform MPs' expenses.
In response, Justice Secretary Jack Straw said one individual could feasibly fill the two roles of Commissioner for Investigations and Standards Commissioner.
He also acknowledged that if the Kelly committee recommended steps which were "incompatible" with the proposed law, it would have to be amended.
Only three days of Commons debate have been scheduled for MPs to scrutinise the proposals before it goes to the House of Lords for two weeks of scrutiny.
The timetable leaves just one day to resolve any differences between the House of Lords and the Commons before the summer recess on 21 July.
Several figures are unhappy about this, veteran Tory MP Sir Patrick Cormack describing it as a "bad bill" which was being considered with "indecent haste".
And Malcolm Jack, the Commons' most senior official, repeated concerns that it would constrain freedom of speech in Parliament by allowing Parliamentary proceedings to be admitted as evidence in criminal proceedings.
Plans for a legally binding code of conduct covering other aspects of MPs' behaviour were dropped on Tuesday amid concerns it would prompt a flood of legal challenges.
The government says it will try to reintroduce it, but apply it only to MPs' financial affairs.