The recent award of knighthoods to former ministers illustrates how the honours system has been "politicised", a cross-party group of MPs has said.
Honouring people sacked in September's reshuffle "flies in the face" of efforts to reassure people the process was free of political influence, the public administration committee said.
It also called for more transparency about the process for revoking honours.
The Cabinet Office said honours were awarded on merit.
The honours forfeiture committee rescinded former RBS chief executive Fred Goodwin's knighthood in February in what the Cabinet Office described as an "exceptional case".
In recent months, the committee has faced calls to act in other cases, notably over Sir Jimmy Savile following allegations of child abuse against the late broadcaster.
In August, the public administration committee urged the government to review the way the honours system is administered. It called on ministers to set up independent bodies to nominate recipients for awards and decide when they should be withdrawn.
It has now reiterated its call for change, suggesting the government's "lack of willingness to clarify and open up the process" was damaging public confidence.
'Political control'David Cameron's decision to recommend a number of former ministers for knighthoods after they lost their jobs in September's reshuffle prompted criticism at the time.
End Quote Bernard Jenkin Conservative MPIf the government supports political control of the award of honours in certain circumstances, it should be prepared to justify it"
The committee made it clear it was not questioning the public service given by those honoured.
But it said it was surprised that Mr Cameron had "bypassed" the parliamentary and political service honours committee before taking the decision.
The committee was set up in May to reward the work of people in politics - including MPs - who "demonstrate selfless commitment for the good of the nation".
Political honours were abolished in 1997 although some people are still honoured for services to Parliament.
Committee chairman, Tory MP Bernard Jenkin, said the recent awards "constitute politicisation of the honours system and flies in the face of the stated position of the government.
"If the government supports political control of the award of honours in certain circumstances, it should be prepared to justify it."
Mr Jenkin said the public wanted a transparent process for the awarding and revoking of honours, with people able to see the value of the honour and what it was awarded for.
"If honours are to retain any meaning and value they must be awarded to genuinely deserving recipients who have contributed to their communities above and beyond the norm," he said.
A Cabinet office spokeswoman defended the honours process, saying they were given for "outstanding contributions and not for simply doing the day job".
"Far from being the preserve of politicians, civil servants and celebrities, the vast majority go to the unsung heroes who do remarkable work in their communities.
"In the last list just over 1,200 people received awards, of which 72% were actively engaged in charitable or voluntary work. Awards are recommended by committees with independent chairs and a majority of independent members."
The honours lists are published at New Year and in mid-June on the date of the Queen's official birthday.
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