Parliamentary standards watchdog Sir Philip Mawer has issued his final annual report before stepping down, urging MPs to focus on building up the credibility of their regulatory arrangements.

The commissioner steps down at the end of the year to take up a new role as the prime minister's independent adviser on ministerial interests.

The House of Commons Commission announced it was recommending that John Lyon, currently the director general of legal and judicial services in the Ministry of Justice, be appointed as his successor.

In his annual report, Sir Philip said that the last 12 months had seen the watchdog being "proactive in identifying areas of risk to the reputation of the House".

He said that "improvements have come about in all these areas".

"There remains scope for further improvement in a number of respects," added the report.

"Helping to achieve the necessary progress is one of the challenges which will face my successor.

"He or she will also have to see through the implementation of whatever decisions the House makes on the review of the 'guide to the rules' and the implementation of the one-stop registration shop for members and on the strengthening of the rules relating to all-party groups."

Sir Philip added that there were also "deeper" challenges such as "building the credibility of the House's standards arrangements in the eyes of both the public and members".

He also pointed to the need to strike the "right balance between necessary regulation and proper accountability on the one hand, and not tying people up with useless and frustrating red tape on the other".

"It has been a privilege to have wrestled with those challenges over what, by the time I step down, will have been almost six years of service as commissioner to the House and to the public," said Sir Philip.

"I wish my successor well; acknowledge that anything I may have contributed has been built on the contributions of my predecessors; and confirm the enormous debt I owe to all those, inside and outside the House, who have helped me in this demanding but I believe, worthwhile task."

In a separate report, the House of Commons Commission noted its "appreciation of Sir Philip Mawer's dedication to the House during his time as commissioner".

"Sir Philip has brought qualities of integrity and impartiality to his role while conducting a series of complex and difficult inquiries with professionalism and fairness," it added.

And after an "exacting" appointment process, it concluded that Lyon had "the necessary standing, ability and personal authority" to take up the role.

The MPs said that he "will bring to it the independence, discretion, and strength of character required to ensure that the system of Parliamentary self-regulation continues to work effectively, and that it is seen to do so both inside and outside the House".

Lyon will take up the appointment initially on the basis of a four-day week at a salary of £108,000 a year.