MP Scott Benton faces being suspended from Parliament for 35 days over a "very serious breach" of standards rules.
A standards committee report said the MP had given the message "he was corrupt and 'for sale'".
If MPs approve the suspension it could lead to a by-election in his Blackpool South constituency.
Mr Benton had the Tory whip withdrawn earlier this year and sits as an independent.
In a meeting with newspaper reporters posing as gambling industry investors, he was caught offering to lobby ministers and table parliamentary questions.
As part of his sanction, Mr Benton would also lose his salary for the duration of any suspension.
A suspension of more than 10 days - if passed by the House of Commons - triggers a recall petition.
If 10% of voters in his constituency sign the petition a by-election would be called.
Mr Benton currently has a majority of 3,690, making his seat a top general election target for the Labour Party.
Labour said the report was "damning".
The party's shadow leader of the House of Commons Lucy Powell said: "This is not an isolated case, but comes off the back of a wave of Tory sleaze and scandal."
The Conservatives are already facing a potential by-election in Wellingborough next year, after the suspension of former Tory MP Peter Bone over bullying and sexual misconduct allegations.
The recall petition there closes on 19 December.
A report by the Commons Standards Committee said Mr Benton had given the message "he was corrupt and 'for sale' and that so were many other Members of the House".
It said he "communicated a toxic message about standards in Parliament" and his comments "unjustifiably tarnish the reputation of all MPs".
Mr Benton had argued that he had not agreed to undertake activity that would breach rules during the meeting with undercover reporters from the Times, which was secretly filmed.
But the committee said he had suggested MPs could lobby ministers, set up meetings with government advisers, table parliamentary questions and provide access to confidential documents.
Its report said Mr Benton had suggested he would be willing the breach Commons rules in return for payment from the company, which turned out to be fake.
It concluded that he had committed a "very serious breach" of rules which require MPs not to do anything that causes significant damage to the reputation and integrity of the Commons.
In a letter to the committee, Mr Benton said: "I do not consider my actions to be a breach of the rules: it is my view that I complied with the letter and the spirit of the rules."
He added: "The meeting was a lapse in judgment and I deeply regret my comments. I would like to again offer my unequivocal apologies for the inaccurate statements I have made."
