Fight to the finish

The shambolic clash over the terror laws is threatening to stretch over the weekend.

After a marathon and bad-tempered allnight sitting of Parliament, MPs and peers are in deadlock today. Both sides are saying they will not give way.

As dawn broke over Big Ben, exhausted peers staggered from the Lords after voting down the anti-terror Bill for the third time in 24 hours after it was passed in the Commons. The Lords want a "sunset clause" on house arrest measures for terror suspects which would cause the law to expire later this year.

But the Government is refusing to budge. In an extraordinary move, government sources threatened to carry on the "pingpong"- - from Lords to Commons and back again - throughout today, tonight and over the weekend unless the cross-party opponents to house arrest powers give way.

A source close to Home Secretary Charles Clarke told the Evening Standard: "We are going to carry on until Sunday night if necessary. There will be no giving way. These are vital measures for national security and the elected will of the Commons must prevail." The threat turned the battle of wills over the Prevention of Terrorism Act into an unprecedented trial of strength.

The fate of the laws could depend on the physical endurance of elderly peers and the staying power of Labour MPs, many of whom are unhappy with the Bill. Time was effectively suspended at Westminster, where today's bonewearying debate was officially still a Thursday sitting that had not ended.

This morning Michael Howard issued a fresh offer to meet Mr Blair to discuss the Bill but warned in the meantime Tory peers would continue to oppose it for "as long as it takes."

Last night's debate was marked by bitter exchanges and furious complaints from ministers at the temerity of unelected peers by voting for a sunset clause.

The Lord Chancellor, Lord Falconer, boiled over with rage. He told peers: "I have never seen a situation where a Bill of this importance is being blocked by this House. There is absolutely no doubt that this House, when there is a disagreement of that sort, will give way to the

Commons." Tory shadow lord chancellor Lord Kingsland retorted: "The rule of law is under threat by this legislation." While the Westminster chaos dragged on, eight foreign terrorist suspects held under existing laws - which expire on Sunday - were preparing to be set free under bail conditions.

Mr Clarke today said he would not budge on the sunset clause proposal, which is the key demand made by Conservatives, Liberal Democrats and Labour rebels.

At 4.45am Charles Kennedy held a council of war with MPs and peers and decided they would stand firm. Lord Oakeshott said: "We are absolutely determined to fight on."

The sunset clause was backed by peers by a majority of 68 - a lower margin than the 150 majority of yesterday which ref lected both the wavering nerves of some peers and the frail health of others who could not sit up all night. The Lords also voted again for amendments requiring all

control orders imposed on terror suspects under the legislation to be issued by a judge and raising the standard of proof from "grounds for suspicion" to the "balance of probabilities". At 3.15am Tory leader Michael Howard called for Tony Blair to be dragged to the House to make a statement.

He seized on an apparent admission by ministers that the security forces had not opposed the sunset clause specifically, as claimed by the Prime Minister earlier. Mr Howard demanded: "Is there any precedent for a Prime Minister present in the precinct of this Palace, and against whom such accusations have been made, shall fail to have the courage to come to that despatch box and explain himself ?"

Mr Howard accused Mr Blair of misrepresenting the advice he received from the security service over the need for a sunset clause. He said the issue now came down to a question of trust in the Prime Minister.

Mr Howard said: "I said when we engaged the arguments about the war in Iraq, the lasting damage would be that if the Prime Minister came to this country again and we had a national emergency and the security services said something needed to be done, nobody would believe him," Mr Howard said.

Mr Kennedy told Radio4 that the Government was effectively "putting a gun" to the heads of those who did not agree with their interpretation of events.

When the Bill returned to the Commons at eight, Mr Clarke put forward three minor new amendments.

Dominic Grieve, the shadow attorney general, said that the Opposition would stand firm on the key principle of a sunset clause because the Bill was so "draconian".