The Government has delayed until the new year the introduction of the controversial Bill to strip the 750 hereditaries of their right to speak and vote in the Lords. But it will still dominate the parliamentary year, which began yesterday with the Queen's Speech.
Ministers will try to rush through other Bills before they allow peers to debate the measure. The move reflects Mr Blair's private fears that the Government may alienate some voters by indulging in "constitutional overload".
In angry Commons exchanges over the Government's programme, Tony Blair and William Hague accused each other of being out of touch with the "people's priorities".
The Tory leader accused the Prime Minister of "fiddling" with constitutional changes to appease the Labour Party while jobs were being lost in the real world.
Mr Hague criticised the Government for wasting a whole parliamentary year on the hereditary issue, instead of waiting two years for its Royal Commission to report on wider long-term reform, including a partly elected second chamber. Mr Hague claimed that removing the hereditaries would create a "House of Cronies" beholden to Mr Blair, which was "so pliant and illegitimate that it would expose the Government to the charge of dictatorship".
Mr Blair mocked the Opposition for preparing to "die in the ditch" to save the centuries- old rights of the Tory-dominated hereditaries. "It is time we ended the feudal domination of one half of our legislature by the Tory party that claims a divine right to govern Britain," he said.
The first recorded Council of Parliament was in 1081, when William I imposed the French feudal system on England and those who had been awarded tracts of land could vote in an embryonic House.
Cabinet sources told The Independent last night that the Bill on hereditaries might not be introduced in the Commons until March, which could delay the start of its tortuous passage through the Lords until May.
A White Paper on Mr Blair's long-term reform plans for the Lords, which had been due to be published this autumn, will not materialise until next year.
Downing Street insisted no decisions had been taken on the timing of the Bill and said this could depend on the Tories' approach to it. "We will see how they react, but we are not in any hurry," one source said.
The Prime Minister insisted that the centrepiece of yesterday's Queen's Speech was the Government's plans to modernise public services such as health, welfare and local government.
The 22 Bills also included changes to legal aid, the youth justice system and trade union rights in the workplace.
Mr Blair highlighted the Government's commitment to education, promising "a real drive to push up standards in primary and secondary schools right throughout the country".
However, the scaled-down programme caused by the looming battle in the Lords was illustrated by the absence of any legislation on education. Government spokesmen could point only to a Green Paper next month on teachers' salaries and conditions.
A row over the limited scale of the Queen's Speech broke out last night when John Prescott, the Deputy Prime Minister, angrily denied Mr Hague's taunts that he was the real loser because his key legislation had been dropped. Mr Prescott, who heads the Department of Environment, Transport and the Regions, responded by saying he had more Bills than any other minister and that many of his transport policies could be achieved without legislation.
But ministers admit the hereditaries' fight to the death will overshadow their other measures. When the Queen announced the abolition of the hereditaries' rights in the Lords, Labour MPs broke with the tradition of listening in silence by murmuring approval. Some hereditaries responded with rumbles of discontent.
Rebel peers may table hundreds of amendments to the Bill, clogging up the Government's legislative timetable. This could scupper the measure in the current parliamentary session, forcing ministers to reintroduce it in a year's time.
But the hereditaries know they are doomed; by invoking the Parliament Act, the Commons can override the Lords after a year's delay. So they will disappear from the upper House by 2000 at the latest.
Baroness Jay, Leader of the Lords, acknowledged the historic change would be "of some concern" to peers but warned them not to obstruct the Bill.
Lord Cranborne, Tory leader in the Lords, criticised the Government for not building a consensus for wider reform. "I fear that in spite of all the talk of a Royal Commission, that the likelihood is we will never proceed to stage two," he said.
Paddy Ashdown, the Liberal Democrat leader, said: "There can be no place in a 21st-century parliament for people with 15th-century titles upholding 19th-century prejudices."
But Mr Ashdown described the Government's overall programme as "too timid", criticising the absence of legislation on freedom of information, a food standards agency and a strategic rail authority.
Responding to this week's call by 114 leading British businessmen for the Government to make a definite commitment to join the euro soon after the next general election, Mr Blair said: "I do agree very strongly with their position that we cannot pretend that this issue is going to go away. It is vital that we prepare our country for the euro."
In a series of broadcast interviews last night, Mr Blair said his opposition to the hereditary principle in the Lords had no bearing on his support of the Queen's role as the head of a hereditary monarchy."We don't see the two as linked and I don't think most people do."
Later, Mr Hague was accused of "entering the gutter" after he used his formal response to attack Peter Mandelson's private life. Although Mr Mandelson's office refused to comment, friends of the Trade and Industry Secretary said they were appalled that Mr Hague referred to allegations about Mr Mandelson's minsterial trip to Brazil earlier this year.
In a speech in which Mr Hague also referred to Geoffrey Robinson, the Treasury minister, as "Lord Robinson of Offshore Funds", he called the minister "Lord Mandelson of Rio".Reuse content