Blair to make Lords reform election issue

Tony Blair was today planning to make scrapping hereditary peers an election issue after being forced to retreat on reforms.

Mr Blair's latest blueprint for the Lords was dramatically abandoned by the Cabinet yesterday, leaving his constitutional programme in disarray.

The surrender of the Bill, which would have axed the last 92 hereditaries and imposed a wholly appointed Upper House, came after angry peers threatened to wreck other legislation in revenge - plus a simmering rebellion by Labour MPs demanding elected peers.

In a statement, the Lord Chancellor, Lord Falconer, blamed Opposition peers and said there was "no point committing further legislative time to this issue at this stage". But he insisted the issue would be revived after the next election. The Prime Minister is now expected to call a special meeting of the Cabinet in a fortnight to hammer out new proposals for Labour's election manifesto. The crucial question is whether Mr Blair will give in to his own backbenchers' demands for an element of elected peers as the price of getting their backing to steamroll reforms through the Commons and Lords.

In a further retreat, the Government agreed to a backstairs deal with the Tories to rescue its Bill to create a supreme court and abolish the role of Lord Chancellor. The Constitutional Reform Bill was defeated in the Lords last week but will now go through to a select committee for possible revision.

John Prescott was said to have been the key figure who persuaded Mr Blair that guerrilla warfare in the Lords was not worth the candle. The row has dogged Mr Blair since he struck a secret deal on reform with former Tory Cabinet minister Lord Cranborne shortly after coming to power. The Prime Minister agreed to let 92 hereditary peers survive in return for cooperation in abolishing the rest.

Ever since, Mr Blair has been struggling to find a blueprint that would satisfy his own MPs while desperate to avoid letting a reformed Lords become a thorn in the side of his Government. Tory constitutional affairs spokesman Alan Duncan said ministers had been forced to accept they could not get the legislation through in time.