Released: 659 MPs, 693 lords, 8 detainees

Tony Blair finally forced his Prevention of Terrorism Bill through the Commons and the Lords after a tactical retreat signalled a dramatic end to a marathon session of Parliament.

Amid chaotic scenes at Westminster yesterday, Mr Blair broke the deadlock by announcing at a hurriedly called Downing Street press conference a concession to allow MPs to change the law next year after an independent review.

That was enough for Michael Howard, the Conservative leader, to claim victory and call off the Tory peers who had been blocking the legislation for more than 30 hours. The Liberal Democrats also accepted the compromise, effectively meaning MPs and peers were freed from debating the issue after a 30-hour impasse.

Mr Howard said: "The Prime Minister has been forced to announce a sunset clause in all but name - he just couldn't quite bring himself to admit it."

The Tory leader accused Mr Blair of playing politics with the anti-terror legislation to portray the Tories as soft on terrorism in the run-up to the election.

Tory whips made a show of victory in the members' lobby. The chief whip, David Maclean, shouted across to a cabinet minister: "We're having champagne in the whips' office." One member of the Shadow Cabinet said: "It was a high-powered game of poker, and Blair blinked first."

But cabinet ministers denied they had made major concessions. "They have got nothing," said one. "We have not given them a sunset clause and we have not conceded a tougher burden of proof. Howard is good at tactics but he is hopeless on strategy. He has lost the battle, because we have got what the police and security services wanted. We have got the Bill."

The dramatic events coincided with a court ruling that freed eight terror suspects held in Belmarsh prison and Broadmoor hospital under the existing emergency legislation.

Last night, most of the terror suspects were being held at a detention centre in west London and were still waiting to be reunited with their families. It was unclear last night at which point the men would become the subject of the control orders brought in under the new Bill.

As the dust settled last night, human rights campaigners warned of the dangers of the introduction of new Bill. The turning point in Westminster emerged after Mr Blair attended the launch of the Africa Commission report. The Prime Minister consulted cabinet colleagues, including Charles Clarke, the Home Secretary and Lord Falconer of Thoroton, the Lord Chancellor, to end the deadlock with the Lords.

Mr Blair used a series of television interviews to set out his principles for wanting the Bill, insisting it was necessary to protect Britain against the threat of terrorism, but he had already agreed his strategy for a partial climbdown.

Mr Howard rallied Tory peers and MPs with a morale-boosting speech after an all-night sitting, telling his side there would be no surrender. The Tories had planned to force the Lords to suspend their sitting for the weekend, if Mr Blair had not made the concession.

Faced with the prospect of losing the legislation, Mr Blair held talks with ministers in the afternoon to thrash out the concession, including Mr Clarke, Lord Falconer, Hilary Armstrong, the Labour chief whip, and Lord Grocott, the chief whip in the Lords.

Lord Falconer had been holding private talks with Lord Strathclyde, the Tory leader in the Lords, who signalled the Tories also wanted a deal. "How can we resolve this?" he is reported to have asked the Lord Chancellor. Another senior cabinet minister said: "We were pretty clear that Howard had overplayed his hand. All the opinion polls show that they are behind us on this legislation. His own people were telling him he was on the wrong side of the argument, and he was doing it when the Belmarsh detainees had been freed and the same day as the anniversary of the Madrid bombings, so people knew that the terrorist threat was real."

Instead of the sunset clause, MPs will be allowed to use another piece of legislation combating acts preparatory to terrorism to change the Prevention of Terrorism Bill next year, if necessary. Mr Blair, speaking of the future independent review on the Bill, said: "I think that is a perfectly sensible way through and I believe in the light of the very strong votes in the directly elected House of Commons, it would be grossly irresponsible to continue the game of playing about with this legislation when it is so obviously necessary.

"Over the past 48 hours, I have been accused of many things but I have simply been trying to do one thing - give the police and those who look after the safety and security of our country, our citizens and families the powers they need to protect us from those who threaten us with terrorism."