David Cameron defended politicians' "second jobs" as a Labour bid to ban MPs from holding paid directorships or consultancies was defeated in the Commons in the wake of the Sir Malcolm Rifkind and Jack Straw 'cash for access' allegations.
The Prime Minister suggested that without outside earnings Westminster would be full of "trade union-sponsored ciphers".
Labour had called for a ban to try to "restore the reputation of the House" following another round of damaging 'cash for access' allegations.
On Tuesday, Sir Malcolm, the former Tory Scottish and Foreign Secretary announced he will stand down as an MP at May's General Election. He had been recorded telling undercover reporters for Channel 4's Dispatches he had "useful" access to British ambassadors.
The parliamentary standards watchdog has announced it had opened an inquiry into Labour MP Jack Straw, caught up in the same sting by the Channel 4 Dispatches programme.
Both men deny any wrongdoing after being secretly taped apparently offering their services for money.
But the allegations have triggered a row about whether or not MPs should be allowed to top up their their £67,000 a year salaries.
Mr Cameron argued that many second jobs provided MPs with useful life experience.
"We have practising doctors in this House, we have practising dentists, we have people who take part serving our country in Afghanistan or Iraq and we do have people who run family businesses or have other interests," the Tory leader said.
"What you want is a parliament where people can come and share their experience and make some points instead of just having a whole lot of trade union-sponsored ciphers."
The Conservatives also accused Labour of muddled plans and a desire to grab headlines than solve a difficult political issue.
Tory MP Alan Duncan accused Labour of targetting Conservatives, who are much more likely to hold business roles than Labour MPs.
Veteran Tory Sir Peter Tapsell claimed membership of the Commons would be limited to "obsessive crackpots" if extra earnings were outlawed.
"I fear that if people in this House are not allowed a second job, membership of it will soon be confined to the inheritors of substantial fortunes, or to rich spouses or to obsessive crackpots or to those who are unemployable anywhere else," he told MPs.
But Liberal Democrat MP Tessa Munt said she believed the public would be "shocked" to know MPs earned a reported £7.4m from outside work in 2014.
The SNP said that Westminster appeared "incapable of cleaning itself up".
As well as a ban on certain jobs, Labour also wants to introduce a "cap" of around £15,000 on MPs outside earnings.
Any Labour MP elected in May will have to agree to the new rules.
Labour's motion was defeated by 287 to 219.
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