Boris Johnson is set to remove the Electoral Commission’s power to prosecute lawbreaking, only a month after the electoral watchdog launched an investigation into the controversial refurbishment of his Downing Street flat.

The government has announced that a new elections bill will remove the commission’s ability to prosecute criminal offences under electoral law on the basis that this “wastes public money”.

The move prompted an angry reaction from the opposition Labour party. “It is not for any government to dictate the priorities of an independent watchdog,” said Cat Smith, shadow minister for democracy. “This is yet another attempt by the Conservatives to rig democracy in their favour.”

The Conservative party has long had the body in its sights, having proposed last summer — to an independent review — that it should be scrapped altogether unless it accepted more scrutiny.

Many senior Tory MPs dislike the commission because it fined Vote Leave, the pro-Brexit campaign group, for breaking spending limits during the Brexit referendum of 2016.

Others are unhappy that the commission opened a formal investigation in April into whether a donation to Conservative party funds, intended to pay for the revamp of Johnson’s flat, should have been declared.

Chloe Smith, constitution minister, issued a statement saying the proper place for criminal investigations and prosecutions relating to electoral law was the Crown Prosecution Service and the police.

“In recent years, the Electoral Commission has sought to develop the capability to bring criminal offences before the courts,” she said. “This has never been agreed by the government or parliament.

For the commission to “step into this space” was not only a waste of taxpayer money but also presented potential conflicts of interest for the body, she added.

The Electoral Commission warned in a statement that the decision would “place a fetter on the commission which would limit its activity”.

“Parliamentary oversight and scrutiny of the commission’s activities are essential in ensuring the commission commands trust and confidence,” it said, adding: “It is important, however, that the commission’s independence is preserved and that it is able to continue to deliver all duties within its remit, including effective enforcement.”

The Electoral Reform Society, a campaigning organisation, called the move a “thinly-veiled government power grab”.

Jess Garland, policy director for the ERS, said: “The government is on the one hand creating new rules for the Electoral Commission to enforce — while at the same time reducing its independence, extending political influence over what should be a neutral body.”

She added: “The Electoral Commission is the UK’s number one experts on Britain’s complex electoral law, so it is vital it retains the ability to raise alleged wrongdoing in the courts.”

The government is also planning to set up a Commons committee, which would have a Tory majority, to set strategic priorities over the commission.