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The scheme set up to oversee expenses complaints against MPs is "woolly" and could be open to legal challenge, MPs have been told.

Former Law Society President Sir Anthony Holland said the compliance scheme should be re-examined.

It emerged in a Commons committee hearing that the compliance officer is looking at about 40 possible breaches.

Lib Dem Bob Russell said he was one of those 40 cases - but said he suspected "political opponents" were behind it.

The Speaker's Committee on Ipsa - the Independent Parliamentary Standards Authority - questioned its chairman, Sir Ian Kennedy, director of finance Bob Evans and director of operations Scott Woolveridge about its proposed £172.098m budget estimate for 2011-12 on Tuesday.

Ipsa was set up following the MPs' expenses scandal to provide independent management of the expenses system - but its budget must be signed off by the committee, headed by Speaker John Bercow.

The three Ipsa chiefs were grilled by the panel of MPs - and one non-MP, Sir Anthony. They defended the organisation's running costs - £6.364m of the estimate - and denied suggestions they were not sufficiently interested in value for money.

'Growing pains'

Conservative MP Charles Walker pressed them about the necessity for a compliance officer - a part time official whose post was advertised earlier this year on a salary of £73,000 pro rata - which saw an 8.6% increase in its budget.

The official can demand MPs repay money - and fine them if they refuse to provide him with information.

Mr Walker asked, as there was a tighter scheme in place which MPs would not want to abuse: "What is the compliance officer doing?"

Sir Ian explained said the post was independent of the rest of Ipsa but added he was dealing with "about 100 inquiries a month" and about 40 "preliminary investigations".

But he said he understood they were "minor infractions which are to do with the growing pains of getting used to a new system" which would never grow into a full investigation adding: "What we are seeing now is MPs living within the rules."

Sir Anthony, who is also the independent complaints commissioner for the Financial Services Authority, raised concerns about the compliance scheme - added to legislation at the tail end of the last Parliament.

He said: "The scheme as it is enacted in the statute is pretty woolly in this area and it's going to cause I suspect, incredible difficulties and sensitivities with both MPs and how the process is done."

"It's a very, very tricky area and it's something that really we want to have perhaps a detailed examination to agree how it is going to work. It is not easy and it is not straightforward and there are vast opportunities for judicial review by various people."

Lib Dem committee member Bob Russell asked how many of the 40 investigations were prompted by complaints from the media or politicians and said he was "one of the 40 against whom a complaint has been made. I'm pretty confident I know from where".

He said there had been "nothing wrong" with his claim but added people could use "false allegations" for "political reasons".

'Impossible'

Mr Russell also asked that Ipsa consider having a monthly allowance for travel claims, above which MPs must make claims, because he said claiming for every four-mile journey left the public thinking: "He's a tight-fisted git isn't he?" - even though claims "add up" over time. Sir Ian said they were moving towards a "monthly tab on mileage".

The Ipsa officials argued that the £6.364m administrative costs of the new system were low compared to bodies like the Electoral Commission - and that they had reduced costs by 10% on a "like-for-like basis" from last year.

Conservative MP Laura Sandys suggested the costs did not include the cost of MPs' staff who have to input claims details into the new expenses system - which she said had been estimated at £1.9m. She said a "disproportionate amount of staff time" was being taken up.

Mr Woolveridge said it was "very difficult verging on the impossible" to estimate the cost but they believed it was somewhere between £136,000 to £150,000 a year and said having MPs' offices enter claims reduced the risk of errors.

Sir Ian said it was right that some time be spent "rendering account of what is done with tens of thousands of pounds of taxpayers' money" as under the old system, the accounts had been qualified by auditors.

The Ipsa chairman also clashed with Sir Anthony, who suggested there was "not a great deal of attention to cost effectiveness" by the body and "no sense of proportion". He asked whether all the details published of expenses were necessary: "It may be to satisfy the media, it may be to satisfy those who are pruriently curious about what members of Parliament are doing, but is it value for money?"

Sir Ian said publication of expenses was at the heart of the scheme and was in response to party leaders' views that expenses must be transparent and said value for money was a big part of Ipsa's decisions.