Government suffers chaotic double defeat over bill to combat religious hatred

The government last night suffered a chaotic defeat over its bill to combat religious hatred when a lethal mixture of Labour rebels, abstentions and absentees from Westminster delivered an unexpected triumph to the combined Opposition in both Lords and Commons.

Though the racial and religious hatred bill came from Charles Clarke's Home Office team, and some MPs predicted that chief whip, Hilary Armstrong will today offer her resignation, Tony Blair contributed personally to the defeat by missing the night's second key vote - which was lost by just one vote, his own.

As the Home Secretary immediately confirmed to gleeful MPs in the Commons the two defeats - the first by 288 to 278 votes - mean that the bill will now go for royal assent in the version amended substantially by the Lords last autumn.

Ministers had made concessions to reassure religious critics - Christian and Muslim, as well as atheists and civil libertarians, who claimed the bill was unnecessary and would threaten basic freedom of speech. Several hundred demonstrators had protested outside parliament for much of the day.

Twenty seven Labour MPs joined Tory, Lib Dem and nationalist critics of the bill and up to 24 did not vote - many because they were working to defend Labour's majority in the Dunfermline and West Fife byelection on February 9.

It was only the second Commons defeat for Mr Blair since 1997, just two months after his reduced 2005 election majority of 64 was overturned in the battle over 90 day detention for terror suspects. But it is certain to embolden critics - peers and MPs - who are determined to defeat the ID cards bill and to modify the secondary school reforms before a bill is published next month.

David Cameron's reviving Conservatives were only on a two-line whip, in contrast to Labour and the Lib Dems, whose three-liner was intended to bring all MPs in to vote. But Labour whips miscalculated and did not think they had to bring their byelection team home, let alone keep the prime minister at Westminster.

"We didn't expect to win," one senior Tory admitted. "But they took their eye off the ball, that is the arrogance of power." David Davis called it " a moment of defeat for Blair, but a victory for free speech." "We messed up," one government whip admitted.

Mark Oaten returned to vote for the first time since his Lib dem leadership bid was derailed by a rent boy scandal. Respect MP George Galloway, back from the Big Brother House, voted with Mr Blair - "he thought it was a feline whip," explained the wags.

Ms Armstrong, aged 60 and chief whip since 2001, is a friend and neighbour of Mr Blair's in the "north east Blairite mafia," and will be supported by No 10 in the crisis, not least because such humiliation reflects bad judgment and staff work there too as Mr Blair's grip on power eases towards his promised retirement.

During last night's debate on the disputed Lords amendments, it fell to junior minister Paul Goggins to assure MPs he had embraced the need to make changes which will clarify the law and protect the free speech of polemicists and comedians alike. Rowan Atkinson had been a vocal opponent.

The bill was a Labour manifesto pledge to close what Mr Goggins admitted was a small loophole in the laws which protect racial minorities from discrimination and abuse - including Sikhs and Jews, but does not prevent hatred being fomented by attacks on faith.

Changes made in the Lords now mean that someone charged with an offence would have to be shown to have used "threatening" language - rather than "threatening, insulting and abusive" the test in race cases. It will also mean that the prosecution will have to show "intention" to foment such hatred by the accused rather than intention or "recklessness" as Mr Goggins's compromise had proposed.

Whitehall officials argued that the bill remains viable, but that the Lords has raised the bar to successful prosecution - which carries up to seven years in prison. Critics said ministers had needlessly pandered to Muslim fears since 9/11 and 7/7 attacks, when existing public order law offered adequate protection.

As Mr Goggins struggled to make his case he admitted that the cartoons critical of Muhammad which have triggered boycotts and a political crisis in Denmark after being published there could attract prosecution under the bill.

"The straight answer is [yes] if there was an intention to stir up hatred or if the person was behaving in a reckless way about the impact of his behaviour," the minister told Labour backbencher Gordon Prentice when MPs on both sides pressed him for specific examples of a likely offence. The disputed cartoons included one showing Muhammad, the founder of Islam, wearing a bomb-shaped turban, and another of him telling suicide bombers he had run out of virgins to award them. MPs offered other examples - such as the punishment of death for seeking to convert Muslims - as possible problem areas.