MEPs' current pay reflects the big east-west gap

Members' monthly salaries will be set at 7,000 euros (�4,660; $8,630), paid by the EU and not member states.

The new plan would end the big pay disparities between MEPs.

It would also close the loophole in the flat-rate travel allowance, whereby MEPs flying economy class receive a refund for a more expensive ticket.

MEPs voted 403 to 89, with 92 abstentions, in favour of the reform package, known as the Statute for MEPs. It must be endorsed by EU governments to take effect.

The current flat-rate system for travel expenses allows MEPs to receive tens of thousands of euros a year in travel payments, on top of their annual salary.

MEPS' MONTHLY SALARIES Italy - 12,435 euros Germany - 7,009 UK - 6,865 France - 5,258 Slovenia - 4,155 Spain - 2,819 Lithuania - 1,183 Hungary - 840 2005 figures (gross) in euros Source: EU Parliament

Under the new statute, they would be reimbursed according to actual costs incurred.

Italian MEPs currently receive the top monthly salary, at 12,435 euros, while Hungarian MEPs earn just 840 euros.

Negotiations on the new statute have taken years and it will apply from 2009, when the new assembly starts work.

"This statute was written in the name of transparency, it brings about a change to a long-standing anomaly," commented Luxembourg 's Deputy Foreign Minister Nicolas Schmit. His country hands over the EU presidency to the UK next week.

"It's not normal that a member should earn 700 or 800 euros when another one earns 10 times more. Also, people would not understand why lawmakers are eligible for getting reimbursed for up to 10 times the value of their (plane) tickets," said Mr Schmit, quoted by the Associated Press.

The new statute also overhauls MEPs' pensions, introducing a standard European pension funded one-third by them and two-thirds by the parliament. At present they can top up their national pensions with a European one.

MEPs will also pay the same tax rate as other EU officials - 20-30% depending on marital status and children - rather than national rates.

They will keep their daily 268 euro allowance to cover food and accommodation on their working days, plus a 3,785 euro monthly allowance for office costs and 14,865 euro monthly allowance for staff.