Curb on Lords if they shun supreme court

Ministers are planning to wreak revenge on the House of Lords if peers proceed tomorrow with a threat to "wreck" a Bill that would abolish the centuries-old post of Lord Chancellor and create a supreme court.

The Government's Constitutional Reform Bill has run into determined opposition from judges and barristers, including the Lord Chief Justice, Lord Woolf.

Tomorrow a retired judge, Lord Lloyd of Berwick, will try a delaying tactic by proposing that the Bill be scrutinised by a select committee before it goes through the normal legislative process.

Privately, Labour's business managers have vowed that if the move succeeds, they will retaliate by curtailing the Lords' powers. One minister described Lord Lloyd's proposal as a "wrecking amendment" because "it would knock the whole Bill into the long grass until after the general election". The minister added: "We started this Bill off in the Lords because it mainly affects [them], but if they wreck it we won't start another Bill in the Lords before it has been to the Commons, and we will curtail the power of the Lords to reflect that."

The Bill is being introduced by Lord Falconer, who intends to be the last Lord Chancellor as well as being the first Secretary of State for Constitutional Affairs. Apart from abolishing a title reputed to date back to 605, the Bill will remove the law lords from parliament and create a supreme court instead.

Judges fear this move will diminish the courts' authority and deny them a powerful voice in Cabinet, whose traditional role has been to defend their independence.

Lord Lloyd, 73, who retired from the bench eight years ago, is likely, in his Lords speech tomorrow, toecho Lord Woolf's fears that such a court would be a "poor relation" when compared with other supreme courts worldwide.

There has also been a ferocious dispute behind the scenes over how much will be spent on housing the new court; ministers are in no mood to accept Lord Woolf's demand that the court gets a budget of at least £50m. The Department for Constitutional Affairs wants the highest court for England and Wales to be within an existing crown court at Westminster.

Lord Falconer is said to be determined to resist pressure for a purpose-built supreme court complex, which he estimates could cost £32m.

The Government's position has been strengthened by the Liberal Democrats, but several Labour rebels may join the Tories in supporting Lord Lloyd's proposal, leaving the Bill's future hanging on the votes of non-party peers.

The Conservative spokesman on constitutional affairs, Alan Duncan, dismissed the suggestion that Lord Lloyd's proposal was a "wrecker"; the Labour Party's plan to end the title of Lord Chancellor had not been a manifesto pledge but had come out of the blue "just to give the impression of radical momentum", he said.