Too many honours are awarded to politicians, celebrities and civil servants rather than to people who devote time and effort to their local communities, MPs said.

The Commons Public Administration Select Committee yesterday condemned the granting of knighthoods to businessmen and senior officials for simply "doing the day job".

It called for a radical overhaul of the system, with the stripping out of all political influence and the creation of an independent honours commission, to restore credibility in the public's eyes.

In its report, the committee stated it believes honours should only be given for "exceptional service above and beyond the call of duty".

David Cameron has made clear he wants the vast majority of honours to go to individuals who have gone "beyond excellence" in contributing to his vision of a "Big Society".

The committee expressed concern that the lack of transparency about the way the system operated had created an impression that honours could be bought – undermining the credibility of the whole process.