The Liberal Democrat leadership suffered an embarrassing defeat last night as activists rejected Government plans to allow some courts to sit in private to hear evidence relating to national security.
A succession of critics warmed that the moves would undermine fundamental principles of open justice. The architect of the proposals, the former Justice Secretary Kenneth Clarke, insists the scheme is essential to help the Government defend itself in a limited number of civil cases.
Liberal Democrat ministers had urged delegates not to back the rebel motion, arguing that much of the Justice and Security Bill, which contains the controversial proposal, was in the public interest.
But activists at Brighton called by a huge majority for their MPs and peers to "press for the withdrawal or defeat" of the Bill.
The Liberal Democrat peer Lord Strasburger denounced the proposed legislation as "hopelessly flawed and beyond repair".
Nick Clegg is expected to use the vote to try and gain more safeguards against the secret courts provision being abused.
After the defeat, Lord Wallace, a Government law officer, said: "It has always been the Government's intention that closed courts should only be used as a last resort and in a very small minority of cases where the alternative is no justice at all."
* Simon Hughes, the Liberal Democrat deputy leader, accused some banks of making racist decisions over lending. He said he had heard of banks turning down requests from black people even if they had a "better financial reputation" than white customers.