Most of the 748 peers in the House of Lords would be swept away and replaced with fewer than 400 elected “senators” under plans being driven forward by the government.

Jack Straw, justice minister, is leading intensive cross-party talks on the future of the second chamber. The talks are now reaching consensus and a committee hopes to publish proposals before the summer recess.

Among the areas on which there appears to be agreement is the proposal for the representatives to be called “senators”.

The new senators would be paid annual salaries, unlike the Lords, who are only paid expenses of up to £82.50 a day.

The pay will probably be lower than MPs’ £62,000 because the role will have no constituency duties, although some Lords want the issue handed to the Senior Salaries Review Board.

Much of the secret discussions revolve around the way in which the 350-400 members – fewer than the 540 mooted only a year ago – will be elected. It is agreed that the “senate” will be either 80 or 100 per cent elected.

Elections could be held at the same time as general elections, European elections, or Welsh and Scottish polls.

Batches of three or four senators would each represent 80 to 100 “multi-member” constituencies. Existing life peers would be gradually replaced as the senators are elected in stages every four or five years.

Each senator would serve for 12-15 years in three terms.

The system could be based on a list or a single transferrable vote.

All three parties are likely to put a commitment to an elected chamber in their manifestos. As yet it is unclear what would happen to the Lords Spiritual – the 26 Church of England archbishops and bishops who sit in the chamber.