The Attorney-General may have to step aside from the key decision on whether there will be a prosecution over “cash for peerages” under the constitutional reforms outlined yesterday.

Gordon Brown prepared for the present responsibilities held by the Attorney-General to be split and said that the holder would withdraw from key prosecution decisions unless required by the law or national security. There has been mounting pressure for a reform of the role of the Attorney-General, currently under review by MPs, and concern about apparent conflicts and tensions inherent in the post.

Three events in particular have fuelled calls for reform: Lord Goldsmith’s advice on the legality of going to war in Iraq; his insistence on a role in the cash-for-peerages affair; and the halting (by the Serious Fraud Office, which the AG superintends) of the investigation into the BAE Systems arms deal in Saudi Arabia.

Lord Goldsmith, QC, who has just been succeeded by Baroness Scotland of Asthal, QC, said that he was bound by law to be involved in the forthcoming decision over cash for peerages. Critics argued that he could stand aside from any personal involvement but retain overall statutory responsibility.

The current 500-year-old post of Attorney-General embraces three roles: giving legal advice to ministers; taking decisions on prosecutions as guardian of the public interest; and acting as a criminal justice minister.

On his last day in the post, Lord Goldsmith insisted last week that he was a lawyer first and foremost and always put political considerations aside. Critics, including Mr Brown’s new constitutional adviser, Lord Lester of Herne Hill, argued that it was difficult to retain public confidence when there is an appearance of conflict of interest.

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