Plans to give police up to 42 days to question terrorism suspects were crushed by the House of Lords last night, halting a three-year, high-wire political battle begun in the aftermath of the 7/7 bombings.

The Government conceded defeat after peers voted against the measure by 309 votes to 118 – the biggest loss since hereditary peers were forced to give up their seats in 1999 – and in a humiliating climbdown announced that the provision would be removed from the Counter-Terrorism Bill.

This came after opposition to the proposals from all quarters, with 24 Labour rebels including two former Lord Chancellors, Lord Irvine of Lairg and Lord Falconer of Thoroton, as well as Baroness Manningham-Buller, the former head of MI5, Lord Justice Woolf, the former Lord Chief Justice, and Lord Condon, the former Metropolitan Police Commissioner.

The Government moved swiftly to limit its embarrassment and in an emergency Commons statement last night, Jacqui Smith, the Home Secretary, announced that the 42-day proposal would be published in a separate draft Bill that could be voted on in the event of a national emergency.

But Home Office sources said last night that this one-page Bill would simply increase the time limit for detaining terrorist suspects and not include all of the “bells and whistles” – Parliamentary safeguards that became the subject of much controversy.

Dominic Grieve, the Shadow Home Secretary, called the proposed legislation “one of the most bizarre things I have ever read”, saying that spin-doctors had prevented Ms Smith from “saying in straightforward terms that she is abandoning 42 days”.

Last night’s defeat came five months after Gordon Brown put his authority on the line to get the vote through the Commons, winning by a majority of nine.

Ms Smith insisted that the Government was not conceding defeat on the measure, and accused critics of “being prepared to ignore the terrorist threat for fear of taking a tough but necessary decision”.

The Times revealed last week that the Government had decided against using the Parliament Act to force the Bill through the Lords last night. Government sources say that such a move would delay the whole Counter-Terrorism Bill by up to a year.

Apart from the provisions for 42 days, the Bill contained powers to enable postcharge questioning of terrorist suspects and allowed courts to draw adverse inferences from silence. It also imposed requirements on people convicted of terrorist offences to let authorities know where they were living.

The rest of the Bill is likely to be passed by the end of this year, having already completed all its stages in the Commons. Labour sources indicated that the 42-day provision was likely to appear in the next manifesto, insisting that “we need this power”.

Mr Brown was warned last night that he would not be able to push the special legislation through Parliament.

Shami Chakrabarti, the director of Liberty, said: “Liberty has been overwhelmed by public and parliamentary support for our campaign against this divisive measure. If this or any future government tries again, rest assured that we will be ready.”

Attempts to strike out the 42-day proposal were led by Lord Dear, the former Chief Constable of the West Midlands, and backed by a cross-party alliance of Baroness Neville-Jones, the Conservative peer, Baroness Mallalieu (Labour) and the Liberal Democrat Lord Thomas of Gresford. Lord Dear told peers that there was “no evidence to date” that the existing 28-day limit had been insufficient. Most suspects had been charged within 14 days.

“There is almost universal opposition to what the Government proposes,” Lord Dear argued. “It almost beggars belief that any administration could embark on such a course.”

Lady Neville-Jones, the Tory home affairs spokeswoman, condemned the Government’s plans as “unnecessary, undesirable and unworkable”.

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