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Cameron set to drop Lords reform

The coalition is set for a major bust-up next week after it emerged David Cameron is poised to kill off Lords reform plans to the fury of Liberal Democrats.

The Prime Minister promised "one more try" to rescue the key constitutional reform after his authority was rocked by a 91-strong rebellion by his MPs last month but is now expected to declare within days that the package is dead in the water, opening the door to retaliation by the Lib Dems over boundary change legislation.

A spokesman for the junior coalition partner said there would be "consequences" of any failure to see through the constitutional change, a key party priority.

But he insisted that discussions over a way forward were ongoing and dismissed reports that the party would accept the U-turn in return for other policies on energy or party finance as "for the birds".

Senior Lib Dem figures including party president Tim Farron have warned that the junior partner would block constituency boundary changes wanted by the Tories if Lords reform was abandoned.

After the Commons reverse, Lib Dem leader Nick Clegg told activists that they should "fully expect the Conservatives to deliver this crucial part of the coalition deal - as we have delivered".

Mr Cameron is believed to have decided that he had no chance of winning over sufficient backbench support to pass a timetable motion for the House of Lords Reform Bill in the autumn.

A damaging Government defeat on such a motion - required to stop it being "talked out" and bogging down other parliamentary business - was only avoided by withdrawing it at the 11th hour.

Labour backs the principle of the reforms but sided with Tory rebels in opposing the proposed time limit on debate - forcing the rethink.

Shadow justice secretary Sadiq Khan said: "Our track record over 13 years is simply unmatched. Our manifesto argued for 100% elected with the proposals put to the people in a referendum. That's why we did the principled thing of voting in favour at second reading, despite the view that in the current economic climate reform of the Lords wouldn't be our priority."

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