The Financial Times (p12) reports that the MPs believe the Greater London Authority Bill places financial contraints on the new executive mayor.
The bill gives Mr Prescott the power to set floors and ceilings for spending by the mayor and to veto proposals for introducing charges on motorists.
Simon Hughes, the Liberal Democrat spokesman on London, said: 'There are over 250 references to the secretary of state in this huge bill, and government powers feature in almost every clause.'
Richard Ottaway, Tory spokesman on London, pointed to a schedule in the bill which said some receipts from charges on motorists could be returned to the Treasury.
But Mr Prescott said 100% of proceeds from such schemes would be recycled for public transport improvements for the first 10 years of the GLA's life.