An influential group of British MPs has recommended phasing out conscription, a review of voting rights for long-term residents and the outlawing of discrimination based on sexual orientation.

The 171-page report on the Overseas Territories by the Foreign Affairs Committee goes on to recommend that the UK Government encourage Bermuda to strengthen its transparency measures, including establishing an independent Electoral Commission and ending the practice of committees of the House of Assembly sitting in secret.

And one passage of the report says: "We recommend that the Government sets out in its response to this report the steps it has taken to ensure that allegations of corruption at the Bermuda Housing Corporation, in the issuing of contracts, and of electoral fraud in Bermuda are properly investigated."

The report noted submissions from Bermudians alleging Government improprieties, including claims that contracts were given to the party faithful, while Special Development Orders had not been handled in a transparent manner.

And concerns were raised about the arrest of the Auditor General who was also thrown out of his office while he was off the Island.

The MPs wrote: "During our visit to Bermuda, the Governor told us that his predecessor had objected strongly to the Bermuda government at the time."

In a chapter on items relevant to Bermuda the team of MPs recommended that the UK Government take steps to ensure that discrimination on the basis of sexual orientation or gender status is made illegal in all Overseas Territories (OTs).

While recognising that extending voting rights to 'non-Belongers' will be politically difficult for OT governments, the UK Government was urged to at least encourage local administrations to review this issue with regard to non-Belongers who have resided in an Overseas Territory for a reasonable period.

The FAC recommended Government should propose that non-Belongers' rights be an agenda item for the next Overseas Territories Consultative Council (OTCC).

The Committee also wants the UK to urge the Bermuda government to move away from conscription and towards the Bermuda Regiment becoming a more professional organisation, with voluntary and paid elements.

The UK MPs argued this could make serving in the Regiment more attractive, giving the staffing resources required to extend into maritime duties.

The FAC recommends that the Foreign and Commonwealth Office (FCO) should also strongly encourage all Overseas Territories which have not yet done so to introduce freedom of information legislation.

The report said the FCO should review with Overseas Territories what steps they might take to improve their public accounting and auditing capability.

And the FAC backed a recent report by fellow British MPs on the Public Accounts Committee's which recommended that the FCO should explore how Overseas Territories might make better use of UK expertise and that it should also explore whether those Territories with Public Accounts Committees could make more use of ex-officio members.

The FAC also wants the Foreign and Commonwealth office to encourage Bermuda to continue to improve financial regulation, in particular in money laundering investigations.

The report noted that Bermuda is the only Overseas Territory whose government favours independence but that opinion polls still showed a majority against splitting from Britain.

The MPs said they were pleased with hints by UK Overseas Territories Minister Meg Munn that an election of a party by a tiny majority in low turnout election would not be acceptable as a way of taking the country to independence.

Months in the making the inquiry by the FAC is the first in ten years on the OTs and saw three MPs visit Bermuda in March to gather evidence.

In a press release accompanying the release of the findings Committee chairman, Mike Gapes MP, said: "This is a wide-ranging report considering the FCO's discharge of its responsibilities with regard to the UK's 14 Overseas Territories and making recommendations across these Territories.

"We considered the FCO's management of the risks and contingent liabilities to which Overseas Territories expose the UK.

"We recommend that the FCO should encourage Bermuda, the British Virgin Islands, the Cayman Islands and Gibraltar to continue to make progress in improving financial regulation, in particular in arrangements for investigating money laundering.

"Overall, we have concluded that, in some cases, the FCO's approach has been too hands-off. The FCO must take its oversight responsibilities for the Overseas Territories more seriously."

Last night, Acting Governor Mark Capes said: "'This report is a significant document that identifies and discusses a wide range of issues in terms of how the Foreign and Commonwealth Office (FCO) manages its responsibilities in relation to the Overseas Territories.

"The FCO will carefully consider each recommendation in the report and prepare a formal response within two months. Meanwhile, I expect that within Bermuda and the other Overseas Territories the report may stimulate some lively debate which I hope will prove to be constructive."

The report will be sent to the Foreign and Commonwealth which will have 60 days to respond.