Labour was accused last night of attempting to sabotage plans for electoral reform by stealth, after Peers voted to make this May's referendum binding only if the voter turnout was above 40 per cent.
The move, proposed by the former Labour minister Lord Rooker and supported by the party leadership, was backed by 219 votes to 218 during the report stage of the Bill.
A similar "threshold" amendment had been opposed by Labour in the Commons, where it was rejected by 549 votes to 31. But the Labour justice spokesman, Lord Falconer of Thoroton, defended the change of tactics on the grounds that Lord Rooker's amendment gave ministers discretion to proceed with the Alternative Vote system if it was supported by electors but turnout was below 40 per cent.
This would cause problems for the Coalition, as many Conservatives privately support the threshold and might try to sabotage the plans even after a Yes vote. Ten Tory peers, including the former Chancellor Lord Lamont, backed the Labour amendment.
It is the Government's third defeat in the House of Lords on a Bill which MPs have already passed, and which ministers are racing to get on to the statute book before Parliament rises next week.
Last night furious Liberal Democrats accused Labour of "rank opportunism". A senior Lib Dem source said: "This is purely about trying to wreck the bill. Ed Miliband talks a lot about new politics but he is unable or unwilling to practice it. He is either making it up as he goes along in the TV studios or he simply cannot control his dinosaurs in the House of Lords."
Labour promised an AV referendum in its general election manifesto, but the party is divided on the issue, with Mr Miliband supporting a change and other leading figures, including the former cabinet minister Margaret Beckett, against.
The Bill combines the Lib Dem policy of an AV referendum with the Tory policy – which Labour opposes – of reducing the number of MPs from 650 to 600 and making constituency sizes more equal.
Lord Falconer later told peers that he had seen the Government's proposed concessions at 2.29pm, just before the House started its sitting, and that they "don't amount to very much in fact".
Ministers will have to decide whether to ask MPs to overturn the defeats when the Bill returns to the Commons next week.Reuse content