The vote would restore maintenance grants as recommended by the Dearing report, and last night jubilant Tories who led the defeat said it would be difficult for the Prime Minister to seek to overturn the Lords' vote.
"Tony Blair said last week in the Commons that he was implementing the Dearing Committee report. The Lords have taken him at his word. He can't get out of that now," said David Willetts, a front bench Tory spokesman in the Commons.
The vote was forced by Baroness Blatch, a former minister and the Tory education spokesman in the Lords, with crossbench and Liberal Democrat support. Labour left wing MPs have warned the Government they could also rebel if concessions are not made by ministers before the Bill returns to the Commons.
Earlier, a Liberal Democrat attempt to overturn the Government's plan for tuition fees for students was narrowly defeated by 14, on a vote of 110 to 96 against the party's amendment. The amendment would have ensured that students' pounds 1,000-a-year fees were repaid as a Government grant.
In the vote, which took place during the detailed report stage debate on Bill, several Labour peers rebelled against the Government line, including Lord Glenamara, the former deputy Labour leader and one-time Secretary of State for Education.
Introducing the amendment, Lord Tope, the Liberal Democrat sponsor, said there was "widespread concern and opposition throughout the country" to tuition fees. He warned that they were a disincentive to applying to university and the next target could be the sixth form.
"The time has come to say that student payment of tuition fees is a step too far in principle, in practice and in terms of the dangers that it opens up."
Lord Glenamara said the Government had "taken leave of its senses" and "gone off its rocker" imposing tuition fees.
It had no mandate to do it, and was putting a "roadblock" on the route to further education. The plan was "grotesquely unfair", he protested.
But Baroness Blackstone, the Education Minister, said the amendment would "run counter to the fair funding arrangements" for higher education which the Government proposed. It would require the taxpayer to bear the full cost of higher education, including paying for those who would eventually earn the highest salaries.
If the amendment was accepted, the only way to control the higher education budget would be to impose strict curbs on the numbers of students and that would be unacceptable.
Lord Tope's amendment was supported by five Labour rebels - including Lord Glenamara - 46 Liberal Democrats, 31 Tories, 12 crossbenchers and two bishops.Reuse content