Although the Prime Minister is said to be keeping an open mind on how best to achieve his reforms, both the leader of the House of Lords, Lord Richard, and the Foreign Secretary, Robin Cook, are said to be in favour of the radical option.
They want to go for full-scale reform straight away, rather than taking the more cautious approach of removing voting rights in the next session of Parliament and then proposing an elected chamber after the next election.
Lord Richard has proposed that two thirds of the second chamber's members should be directly elected, while the rest should be appointed in the same way as life peers. Elected members would sit for a fixed term, on a cycle designed not to clash with general elections.
Mr Blair's new cabinet committee will be chaired by Lord Irvine, the Lord Chancellor, and will include Lord Richard, Jack Straw, the Home Secretary and Peter Mandelson, minister without portfolio.
A Bill to remove hereditary peers' voting rights will be introduced in November next year, but there are moves to introduce fuller reforms at the same time. Some MPs would oppose the idea of an elected chamber, seeing it as a potential rival to the Commons.
Mr Blair's most likely course of action will be to delay the second part of the reform, putting forward proposals now but postponing their implementation until later.
At present, there are 499 Tory peers, 326 of whom are hereditary, and 158 Labour peers, 15 hereditary. The Liberal Democrats have 66, of which 23 are hereditary, and there are 325 cross-benchers, 205 of whom are hereditary. The Conservatives have not decided exactly what line to take on the issue, but a number of them will certainly oppose any proposals for reform.Reuse content