The controversial criminal courts charge imposed by Epsom and Ewell MP Chris Grayling must be abolished "as soon as possible", according to the Conservative-dominated justice select committee.

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Mr Grayling introduced the measure - which imposes mandatory payments of up to £1,200 on all convicted defendants - in April.

The former justice secretary said in March that the charge would ensure criminals "pay their way".

But the justice select committee - a body set up to scrutinise the Ministry of Justice - argue the charges create "perverse incentives" for defendants to plead guilty, are a "grossly disproportionate" punishment for many charges, and undermine compensation paid to victims.

Chairman of the cross-party committee Bob Neill said to a justice committee meeting: "The evidence we have received has prompted grave misgivings about the operation of the charge, and whether, as currently framed, it is compatible with the principles of justice.

"It creates a range of serious problems and benefits no one. We would urge (current justice secretary) Michael Gove to act on our main recommendation and abolish it as soon as possible."

It is the latest in a series of public scrutinies for Mr Grayling after he was criticised for his defence of cuts to tax credits, and then again two days later for his condemnation of journalists who he said abuse the Freedom of Information Act to generate stories.

One of the cases cited in the report published by the justice select committee today into criminal courts charges was that of a 32-year old woman who admitted to stealing a four-pack of Mars bars worth 75p.

She said she stole the item because she "had not eaten in days" after her benefits were sanctioned.

She was fined £73, ordered to pay a £150 criminal courts charge, £85 costs, a £20 victim surcharge, and 75p compensation.

Frances Crook, chief executive of the Howard League for Penal Reform said: "The innocent have been put under pressure to plead guilty, and ordering indigent people to pay money they simply do not have is never going to work."

MPs believe that only a very small proportion of fines imposed since April have been collected.

Although no official figures were available, the committee said it appeared that just over five per cent of the £5.6 to £5.9 million charges handed down in the first three months had been paid - "substantially below" the rate for other types of financial sanction.

The MoJ said the concerns were noted and the operation of the fee was being kept under review.