Restaurants could be made to reveal on menus how much, if any, of their service charge is paid to waiting staff. The measure will be among proposals announced next week to ensure that diners know what happens to their tips, The Times has learnt.

Some establishments keep all gratuities, while others – particularly restaurant chains – funnel tips into waiters’ basic wages. Ministers have already pledged to close a loophole that allows restaurants and hotels to use service charges to top up pay rates beneath the minimum wage, currently £5.73 an hour.

Next week they will publish proposals for greater information on what happens to discretionary charges, typically 10 per cent or 12.5 per cent.

The consultation comes after negotiations between the industry and the Department for Business, Enterprise & Regulatory Reform.

A senior figure involved in the talks said: “People leaving a gratuity assume that it’s going to the person that served them – they have a right to know whether that’s the case.”

The proposal emerged as ministers sought to reassure Labour MPs that they would honour the commitment to force restaurants to pay waiters the full minimum wage before any tips.

The Conservatives want to amend the Employment Bill to outlaw the practice of using tips to top up pay, but ministers say that existing legislation can be used to plug the loophole. Pat McFadden, the Business Minister, said: “We announced our decision to do this in July. Since a change in primary legislation is not necessary the Tory amendment is meaningless.”

Bob Cotton, chief executive of the British Hospitality Association, said that establishments and chains should keep the right to decide what to do with tips but that it was right that customers should know what was happening to their money.

Industry representatives are expected to argue against using menus to publicise tipping policy, insisting that the information should be published on websites or on posters.

Restaurant chains reported to use gratuities to make up the balance between their basic rates and the national minimum wage include Strada, Carluccio’s, Café Rouge, Chez Gérard and Caffè Uno. Labour allowed the loophole to remain when it introduced a statutory pay minimum to avoid a battle with business, Ian McCartney, the party’s former chairman, has admitted.

Unite, the union that led the campaign to close the loophole, said that action was overdue. The consultation, which is expected to be published on November 12, could lead to legislative changes early next year, according to sources at the Government’s business department.

There are two types of service charges: compulsory or discretionary. It is discretionary if the service charge is not mentioned on the menu but appears on the bill.

By law the customer must be informed about a compulsory service charge with a notice outside the premises, before getting to the table. If the customer receives bad service, he or she can refuse to pay the compulsory charge but it is advised to explain the reason and to leave one’s name and address with the restaurant so as not to be accused of “doing a runner”.

Gratuitous information

China Tipping is very rare, but foreigners are charged more

US Up to 20 per cent in restaurants; a dollar or two in bars

Australia, Japan Not expected

Singapore The Government discourages it and it is illegal to tip in the airport

Mexico Expected for any service

India Tip a guide but not a taxi driver, a barman but not a clerk

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive