The Government's "seriously flawed" lobbying reforms should be withdrawn for up to six months so a special committee can produce improved proposals, a cross-party report has concluded.
The Political and Constitutional Reform Committee's scathing report found that the legislation had been "unnecessarily rushed" and failed to cover large parts of the lobbying industry.
Charities and other organisations have warned that the Bill's tougher rules on political spending could hit their ability to campaign and the committee criticised the "confusing" proposals.
The legislation was given its second reading in the Commons by 309 votes to 247, but the comfortable margin masked significant opposition across parties, with Leader of the House Andrew Lansley forced to deny the measures were a "dog's breakfast" and hint at concessions later in the process.
The Transparency of Lobbying, non-Party Campaigning, and Trade Union Administration Bill would set a £390,000 cap on the amount any organisation - excluding political parties - could spend across the UK during elections. A statutory register of lobbyists would also be introduced to identify whose interests were being represented by consultant lobbyists and those who were paid to lobby on behalf of a third party.
The Bill was published in July following allegations about the influence of lobbyists on Government decision-making as well as the involvement of peers and MPs with lobbying groups.
But the Political and Constitutional Reform Committee's report said: "As proposed, the Bill would do little, if anything, to impact upon the scandals that led to all parties supporting legislation. This will disappoint the public and reduce further their trust in politics." It added: "The Bill's definition of 'consultant lobbying' is flawed. Not only does it exclude in-house lobbyists, which was the Government's intention, but as currently drafted it would also exclude the vast majority of third-party lobbyists, and particularly the larger organisations."
The proposals on spending limits, aimed at preventing US-style election campaigning by non-party groups, have been criticised not only by those who fear they will be caught by the proposals but also the watchdog which would have to enforce them.
A Cabinet Office spokesman said: "The Government is very grateful to Graham Allen and his committee for the work they have done over the summer to produce this report. We welcome the fact that the committee agrees with the need for this legislation and we will of course consider the findings carefully and respond in due course.
"This Bill is about creating even greater transparency in the way people and organisations interact with government and politics, to give the public more confidence in the way third parties interact with the political system. These organisations play an important role in the political process, helping to inform policy making and ensuring views are heard by those in government. This Bill will ensure that we know who lobbyists lobby for; how much money is spent on third party political campaigning; and make sure trades unions know who their members are. We look forward to working with the Opposition and others as the Bill passes through Parliament to make sure we have a system that works in the long term."