Whistleblowing legislation that could see companies fined millions of pounds for attempted cover-ups is being considered by the Government, The Telegraph has learned.

A draft bill, which will be debated by MPs this week, would also outlaw non-disclosure agreements and set up a new tribunal where whistleblowing cases will be heard.

It is backed by several Tory MPs and at least two former ministers including Maria Miller and John Penrose, the Government’s anti-corruption tsar and chair of the Conservative Policy Forum.

The Ten Minute Rule Bill will be proposed by Mary Robinson MP on Tuesday, and if approved it would protect whistleblowers from criminal or civil action being taken against them.

It would see people compensated for any loss they experienced – such as being dismissed from their job – as a result of their whistleblowing.

New regulator set up 

A new regulator, called the Office of the Whistleblower, would be set up to investigate protected disclosures, according to a proposal to be voted on by MPs this week.

The regulator would set minimum standards for workplace whistleblowing policies, monitor and enforce compliance of those standards, and bring prosecutions for whistleblowing offences.

It would also create new civil penalties – with a maximum fine set at 10 per cent of a company’s turnover up to £18 million – for those who fail to comply with an order from the Office of the Whistleblower, according to a copy of the document seen by The Telegraph.

A new criminal offence of subjecting a whistleblower to detriment is included in the draft bill, which carries a maximum jail term of 18 months.

The bill has also received cross-party support, including from Dame Margaret Hodge, the veteran Labour MP and the SNP’s Dr Lisa Cameron.

If adopted, this would be the first major change to whistleblowing legislation in over two decades, since the Public Interest Disclosure Act of 1998.

Existing legislation

Ms Robinson, the Conservative MP for Cheadle who chairs the all party parliamentary group of whistleblowing, said she has had numerous meetings over the past year to discuss the issue with the Business Secretary Kwasi Kwarteng and one of his ministers, Paul Scully.

She said the problem with existing legislation is that whistleblowers often end up in employment tribunals that do not address the actual claims of wrongdoing, but rather focus on whether the worker was unfairly treated as a result of their disclosures.

The current whistleblowing regime enables workers to bring an employment tribunal claim against their organisation if they are dismissed or treated unfairly at work because they have made a “protected disclosure” about wrongdoing.

These protections were set up in the Public Interest Disclosure Act 1998 (PIDA) but Ms Robinson said these laws are now “stopping people from speaking up” because they are deterred by the cost and complexity of the system.

Ms Robinson added: “This Bill will bring about balance and put the responsibility for ensuring that people are safe with those organisations who will no longer be able to hide behind a broken system.”

A Whitehall source said the Government is “completely behind” protecting whistleblowers, adding that they are “currently considering our position” on the bill.