Plans for an elected House of Lords are likely to fall victim to the Coalition's desire to convince voters it is prioritising economic growth.
Conservative ministers believe Nick Clegg's flagship scheme will die a "slow death" as it runs into strong opposition in both the Commons and the Lords.
A Lords Reform Bill will be included in the Queen's Speech today after Mr Clegg rebuffed demands from Tory MPs for it to be dropped. But yesterday the Deputy Prime Minister appeared to downgrade the importance of the measure.
At an event with David Cameron aimed at relaunching the Coalition, Mr Clegg said: "I care a lot more about apprenticeships than I do about House of Lords reform. I care a lot more about the fact that, as of next April, two million people on low pay will be taken out of paying income tax for the first time."
On their joint visit to a tractor factory in Basildon, Mr Cameron appeared lukewarm about the Lords shake-up, saying: "I wouldn't... say that this is the most important thing the Government is doing."
Last night Clegg allies denied that the proposal for 80 per cent of the Lords to be elected is being diluted, insisting the Government remains committed to it. But there is growing speculation at Westminster that ministers will pull the plug if the Bill is delayed by opponents and threatens to clog up the parliamentary timetable.
One option being floated is a trade-off in which both the Lords shake-up and plans to cut the number of MPs from 650 and 600 and bring in new constituency boundaries are shelved until after the 2015 general election.
Mr Cameron and Mr Clegg re- affirmed their commitment to the Coalition's core purpose of repairing a broken economy, but admitted that securing growth had been more difficult than they had predicted.
Labour seized on a comment by the Prime Minister, who said during a question-and-answer session with staff at the factory: "What you call austerity, what I might call efficiency."
Chris Leslie, a Labour Treasury spokesman, said: "While he claimed before the election he would just cut waste, his so called efficiencies actually mean deep cuts to frontline services like police officers, slashing tax credits for working families and raising taxes on pensioners."
- More about:
- Liberal Democrat Party