Cameron: I'll ditch Lords reform if we cannot reach a compromise

Prime Minister issues ultimatum to Tory rebels as he prepares to reveal watered-down proposals

David Cameron wants to water down plans for an elected House of Lords in an attempt to broker a compromise between the Liberal Democrats and rebel Tory MPs.

But in a move that will infuriate his Coalition partners he is making it plain he will ditch reform altogether if consensus cannot be reached rapidly. The PM is struggling for a compromise that will satisfy both the Liberal Democrat leadership and his Conservative critics who staged a dramatic rebellion against the plans to elect 120 peers in 2015.

The plans have briefly been put on hold while he tries to find a reform blueprint that will satisfy both sides.

Under one proposal being examined by Downing Street, the remaining 92 hereditary peers would still be expelled in 2015. Elections for a much smaller number of seats in the Lords – possibly around 50 – would be held at the same time.

Mr Cameron could back the move with a promise that further waves of elections to the Lords would have to be approved by votes of MPs in subsequent Parliaments.

Last night Mr Cameron told his MPs at a private meeting that he would examine whether there would be support for a reformed Lords with a "smaller elected element".

Tory sources believe the proposal would enable Nick Clegg, the Liberal Democrat leader, to tell his party that he has secured the first elections to the Upper Chamber.

Meanwhile Mr Cameron could reassure his restless MPs – 91 of whom rebelled on Tuesday against the current reform plans – that the change is marginal and represents little challenge to the supremacy of the Commons.

Conservative sources were clear yesterday they did intend to devote much more time trying to find a way out of the deadlock. "We're going to give it one more try in the next few weeks. If it's not possible, then we are going to draw a line," said one.

Currently, however, there is little appetite for concessions among senior Liberal Democrats – and party sources made clear last night that the Cameron initiative had not been squared with Mr Clegg. "We have consistently marched our troops towards gunfire to support Tory priorities – it isn't too much to ask for the same thing in return," a minister said.

However, Tory rebels were not in the mood yesterday to back down following their success in outmanoeuvring their party's leadership on Tuesday.

"There is no package they can put together that will satisfy us. We want it killed – we don't want compromise," one said. Tensions were running high in the Commons yesterday after the Conservative revolt forced the Government to abandon plans to set a limit on the time MPs could spend discussing the reform plans.

Sir George Young, the Commons leader, is expected to tell MPs today that the "programme motion" – stipulating the time spent on the Bill – will be brought back to the Commons in September.

Mr Cameron brushed aside claims that he was involved in an angry confrontation with Jesse Norman, a leading Tory rebel on Lords reform, as "tittle-tattle and rumour".

The Labour MP Karl Turner, an eye-witness to the clash, said: "The Prime Minister put his finger in his face and was pointing at him. I heard him say words to the effect that this wasn't the action of an honourable man. The area was jam-packed – the prime minister had clearly lost his rag and didn't care who was witnessing it."

PM loses his cool: So who's felt his rage?

Nadine Dorries The Prime Minister's ire is not always reserved for the Opposition. When asked by Tory MP Nadine Dorries if he would tell his deputy, Nick Clegg, who was boss, he replied: "I know the honourable lady is extremely frustrated... err... maybe I should start that again." Mr Cameron apologised to her by text message later that day.

Ed Balls In January, he said it was like "having someone with Tourette's sitting opposite you". In May, dismissed him as a "muttering idiot" during Prime Minister's Questions.

Douglas Carswell Mr Cameron turned on the Tory right-winger after the MP hinted that the Government resembled the regime depicted in Yes, Minister.

Dennis Skinner After criticism over Jeremy Hunt and BSkyB, a riled PM retorted: "The honourable gentleman has the right, at any time, to take his pension and I advise him to do so."

Jesse Norman The Tory MP for Hereford got the full "Eton hairdryer" treatment. Mr Cameron jabbed his finger in his face and declared his conduct "not honourable".