MINISTERS have announced plans to outlaw within weeks a controversial system of gratuity payments to councillors serving on the boards of bodies funded by the same local authority.

Finance Secretary John Swinney will today publish new regulations to stop local authorities allowing a body it controls awarding payments, in a pre-emptive swipe aimed at Labour-run Glasgow City Council’s raft of so-called arm’s-length external organisations (Aleos).

The amended regulations will come into force on July 1, subject to Parliamentary approval, although councillors will still be able to claim for associated expenses.

The move comes more than a year after The Herald revealed former council leader Steven Purcell used Aleo payments to underpin a complex system of political patronage, a system that continues largely as was in 2010.

It costs the council more than £250,000 a year to have its councillors involved in bodies that carry out work the authority did itself before it was hived off.

The council -- the only one in Scotland to make the extra payments -- had also been told by the Scottish Local Authorities Remuneration Committee (SLARC) to axe the system.

Mr Swinney warned in an interview with The Herald before the election he would use legislation to end the system if the SNP was returned to power.

Several prominent members of the administration have been lobbying for some time for the payments to be scrapped.

Sources claim too many backbench councillors contributing little to the authority were taking home anything up to £20,000 on top of their basic salaries and were concerned more about their salaries than their re-election prospects next year.

There has also been concern the SNP would use the payments against Labour in the run-up to the municipal elections, particularly against a backdrop of pay freezes, cuts to terms and conditions and redundancies.

While some have also suggested the move could strengthen the leadership of Gordon Matheson by removing distractions, there is little doubt it will be a major blow to those councillors benefiting from the patronage system.

Big earners have included Anne McTaggart, who entered politics less than two years ago and is now also an MSP. She collected almost £13,000 for sitting on two bodies and moved from one to another several times in her short political career.

Last night Mr Swinney told The Herald: “A limited number of councillors can receive additional payments to help deliver broadly the same services as delivered by their own councils. In effect, some councillors are being paid twice.

“The SLARC report highlighted that only Glasgow City Council had a policy to pay additional monies and confirmed that 40 councillors were sharing £260,000 in additional payments. This completely undermines the principles of the existing councillor remuneration scheme.”

A number of councils have set up Aleos to provide services usually undertaken by the council itself, such as leisure services. Council staff transfer to the Aleo, which is legally separate from the council, but the authority retains control by having elected members and officials in a governance role.

Mr Swinney has amended regulation three of the Local Governance (Scotland) Act 2004, which “prohibits a local authority to allow a body controlled by it to make any payments to its councillors by way of remuneration, other than allowances for reimbursement of receipted expenses”.