Despite previous concessions, Earl Ferrers, Minister of State at the Home Office, headed off the House of Lords defeat by agreeing not to proceed at this stage with Police and Magistrates' Courts Bill proposals to end local government control of authorities through allowing the Home Secretary to appoint half their members.
Critics have succeeded in chipping away key provisions of the Bill, with last night's setback ranking as the third significant U-turn.
Michael Howard, the Home Secretary, had already abandoned plans to appoint authority chairmen and limit members to 16. The Lord Chancellor, Lord Mackay of Clashfern, climbed down over provisions for performance-related pay and fixed-term contracts for justices' clerks and for the appointment of magistrates' courts committee chairman subject to his approval.
During last night's committee stage, all the speakers bar Lord Whitelaw, a former Tory home secretary who led the protests on the Bill's Second Reading last month, insisted that Mr Howard's concessions did not go far enough.
Promising consultations in time for the Bill's report stage, Earl Ferrers said he would not press ahead with the scheduled government amendments.
Lord McIntosh of Haringey, Labour's home affairs spokesman in the Lords, said afterwards: 'We are absolutely delighted that the Government has undertaken to look again at these two issues. The whole House is obviously determined that there should be no Tory placemen on police authorities.'
Lord McIntosh described the Bill as 'holed below the water line'. He added: 'The Government ran away from a fight because they knew they were going to be beaten. Unless they give way now they will be beaten again.'
Tony Blair, shadow Home Secretary, said: 'The Government's legislation on law and order has now descended into shambolic farce, which would have been entirely avoidable had they listened in the first place to the virtually unanimous opposition.'
Lord McIntosh told the House that while the Government had made welcome concessions under pressure from its own side, police authorities would still be left in an unstable position. The current system, involving chief constables, local authorities and the Home Secretary, had worked well for 30 years.
Lord Peyton, a former Tory Cabinet minister, said the Government had failed to justify 'usurping' local government powers.
Lord Rippon, a former minister, warning that he would vote with the Opposition, said there should be an absolute majority of local authority members on police authorities. Checks and balances were essential because powers might rest with a bad home secretary.