Public sector bodies that pay excessive salaries to senior staff should be named and shamed, MPs have said.

The Commons public administration select committee has called for the creation of a Top Pay Commission that could produce principles and benchmarks to guide those that set pay and investigate when advice is not followed.

MPs of the committee looked into the matter as they became concerned about the widening gap between executive pay and the wages of workers further down the scale.

The committee's report blames increases in public sector senior salaries on "stratospheric pay increases" in the private sector and the public sector's habit of competing over a small number of experienced candidates, rather than nurturing internal talent.

A lack of transparency and tensions between devolved and centralised pay-setting systems are also to blame, the cross-party group of MPs has claimed.

Committee chairman Dr Tony Wright said: "Set against the stratospheric pay increases seen at the top of the private sector over the last ten years, the public sector has got excellent value from many of its top people.

"However, we do not believe that the ever-growing gulf between average earnings and top pay is sustainable or desirable – especially in a time of recession.

"Our Top Pay Commission would ensure that public sector pay setters would have to justify top pay deals and set them in the context of pay at lower levels and the state of the public finances."

While the Conservatives have suggested that any pay deals bigger than the prime minister's wage of £198,000 should be vetoed by the chancellor, the committee decided against a cap on salaries because it would be "arbitrary and unlikely to deliver better value for money".

Instead, the Top Pay Commission could take on the responsibilities of existing pay bodies and provide cross-public sector principles.

The MPs have also called for there to be more transparency, including publication of all salaries over £100,000, and for better performance management to prevent employees being rewarded for failure.