Key issues dropped from Queen's Speech

Key constitutional changes have been dropped from this week's Queen's Speech, delaying reform of the House of Lords and making proportional representation for Euro-elections almost impossible in time for the next poll in 1999.

However, other important reforms, including incorporation of the European Convention on Human Rights in British law and a Bill to set up a new authority for London with an elected city mayor, have won places.

The lack of any legislation proposing reform of the voting system for European elections is the first big setback for the Liberal Democrats, who had been urging the new government to push the measure forward.

One Government source said that the Lib Dems had played their hand badly, angering Labour figures by stressing their determination to oppose the Government on key issues - particularly those connected to Scotland, where they are the largest opposition party.

Delays to the reform of the Lords, where the Government proposes to end the voting rights of hereditary peers, will also dismay constitutional reformers.

However, proponents of PR argue that it might be possible to enshrine reform of the Euro-elections in another Bill needed to achieve PR for a Scottish Parliament and Welsh Assembly. Bills to allow referendums on Scottish and Welsh devolution have won places in the speech.

Other measures to be unveiled on Wednesday underline the scope of what will be the most radical political programme in recent memory. The Government will take the first move towards a Bill of Rights by legislating to incorporate the European Convention on Human Rights into British law.

It has emerged that John Prescott, the Deputy Prime Minister, has won three Bills in the Queen's Speech. One will set up regional development agencies, fulfilling one of Mr Prescott's new briefs - rejuvenating the regions.

The Deputy Prime Minister's new "super ministry" is also proposing legislation to permit the release of capital receipts accumulated by local authorities from the sale of council houses but which they were prevented from spending. This will involve "phased" release of the cash so as not to overheat the housing market.

As expected, the package will also contain two education Bills, a Crime and Disorder Bill, a Finance Bill which will implement the windfall tax on the utilities, and a Low Pay Bill.