Tony Blair has been accused of exploiting the case of Abu Hamza to bolster support for his plans to create a new offence of "glorifying" terrorism.
Conservatives and Liberal Democrats said the conviction of the cleric proved existing laws were adequate to outlaw those who incite terrorist acts.
They vowed to continue opposition to the planned new law, warning that it threatened free speech.
Peers have moved to tighten the proposed law, removing references to glorifying terrorism and ensuring that prosecutors must prove intent when pressing cases of indirect incitement to terrorism.
But ministers have pledged to reverse the defeats to "send a message to the courts" that praising terrorism and incitement to "repeat attacks" are unacceptable. MPs will vote on whether to restore the offence to the Bill next week.
Yesterday the Prime Minister's spokesman said: "I think, without talking about the Hamza case as such, what it illustrates is why we believe there are additional powers necessary in this area and why we are putting forward legislation which comes back to the House next week on, for instance, glorification of terrorism."
He added: "It is a fact that in the past there has been identified a grey area where it has been difficult to prove incitement."
But David Davis, the shadow Home Secretary, condemned the claim as "nonsense". He said: "It would appear the only reason Abu Hamza was actually prosecuted was because the US was seeking his extradition. No. 10's claims that adequate laws are not available to prosecute is nonsense."
Alastair Carmichael, the Liberal Democrat home affairs spokesman, accused the Government of "spin and gimmickry". He said: "The Abu Hamza verdict shows that the existing law is fit for purpose."
Bob Marshall-Andrews, Labour MP for Medway and an outspoken critic of the proposed offence of glorifying terrorism, said: "This does not make any difference to the argument at all. Hamza was convicted quite readily and without this new legislation. Almost by definition this legislation is totally unnecessary."Reuse content