The size of the House of Lords should be slashed by a quarter, says committee of peers
The report has said that the current number of more than 800 peers is too much and the number needs reducing by 200 and capped at 600.
The recommendations come after criticism over the bloated size of the Lords and the scale of expenses claimed by some peers despite failing to speak in the chamber.
There has also been controversy over the way that Remainers have tried to use their majority in the unelected Lords to thwart the will of the British people in the referendum.
Pro-Brussels peers including Lords Mandelson, Heseltine and Kinnock have most recently threatened to scupper the Exiting the EU bill.
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The real danger of the present situation is that the House size will continue to grow
Lord Burns – Committee chairman
The committee concluded that parties should be asked to sign up to a "two out, one in" system to hit the new level in just over a decade.
It also suggested that peerages could become honorary titles like knighthoods to bypass the problem of people receiving it having to automatically sit in the Lords.
New peers would serve a maximum of 15 years under the recommendations from the Lord Speaker's committee.
The size of the 800-strong upper chamber would be capped at 600 and its composition would reflect general election results.
Reforms will need the backing of Prime Minister Theresa May
Some 150 peers would leave by 2022, but 75 new appointments would be made in that period under the timetable set out by the committee.
In the five years to 2016, 125 peers retired or died.
Reforms can be carried out without legislation but will need the backing of Prime Minister Theresa May and co-operation from political parties, the committee said.
It also warned that in the long-term a failure to reform would mean "the number of life peers will settle at about 875 which, together with 92 hereditary peers and 26 bishops, would give a total membership of nearly 1,000."
Committee chairman Lord Burns said: "The real danger of the present situation is that the House size will continue to grow."
Lord Speaker Lord Fowler said: "The House of Lords carries out vitally important work in holding the government of the day to account.
"However, with over 800 members – about 150 more than the Commons – we are too large.
"The time has now come to take action to correct this and put a cap on numbers for the future."
Lord Fowler hoped there would be a debate on the report before Christmas
He later told peers: "A smaller, more effective house will be able to strengthen public confidence and build support for our vital constitutional role."
Lord Fowler hoped there would be a debate on the report before Christmas with more detailed consideration of the specific measures proposed in the New Year.
A Downing Street spokesman said that the Government would consider the report but that Lords reform is "not a priority".