Lobbyists and trade unions who seek to influence government policy will be forced to sign a compulsory register, under plans due to be unveiled on Friday.
Concerns that the firms exert undue influence led the Tories and Lib Dems to hammer out a deal in their coalition agreement to introduce a statutory register of lobbyists to ensure "greater transparency" in the industry. Under the proposals lobbying firms are expected to have to declare who their clients are.
David Cameron warned in 2010 that lobbying was "the next big scandal waiting to happen" in Westminster following the furor over parliamentary expenses.
Executives of one firm, Bell Pottinger, including an ex-Tory politician, were recently secretly taped saying they could directly influence Cameron and senior ministers on behalf of private sector clients.
Downing Street dismissed that as "simply untrue" but the case further fuelled demands for a register following a string of scandals over recent years.
In 2010 three former Labour ministers were stripped of parliamentary passes after they breached lobbying rules and the House of Lords was rocked by a "cash for amendments" scandal.
Stephen Byers, a former trade secretary, was caught by undercover reporters posing as a lobbying firm describing himself as “like a sort of cab for hire” for up to £5,000 a day to use his contacts to push for changes in policy.
Concerns over the influence being wielded by lobbyists also led to the resignation of defence secretary Liam Fox.
There are rules on political lobbying, but there is currently no law that compels lobbying firms to register their activity.
Labour said any new system needed to include a detailed code of conduct with "clear consequences for those who breach it", including being struck off in the worst cases.
Shadow Cabinet Office minister Jon Trickett said: "The government need to get serious about lobbying transparency. If we are to give an assurance to a sceptical public that politics is serious about cleaning up its act then we need action now.
"The government must use this opportunity to sort out once and for all the serious flaws in the current system that allowed the recent scandals to happen.
"There is now widespread acceptance that there needs to be statutory regulation. There needs to be a statutory register of lobbyists with a clear definition of what lobbying is and everyone who comes under the new definition of lobbying must register.
"There needs to be a code of conduct with clear consequences for those who breach it, with the ultimate sanction of being struck off the register in the most serious cases.
"Let's be clear - a halfway house on lobbying will not suffice."
Among questions the consultation is likely to examine are how lobbying should be defined, how much information should be included about individuals and the bodies they lobby on behalf of, and how the register should be funded.