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In a humiliating blow to Mr Blair, who has a 65-seat Commons majority, 21 Labour rebels voted with Opposition MPs while at least 40 more were absent or abstained.
It soon emerged that Mr Blair had returned to Downing Street after being told by Hilary Armstrong, the Chief Whip, that there was no point in staying for the crunch vote after an earlier measure was lost by a majority of ten.
In what proved to be a disastrous miscalculation, however, Mr Blair’s absence will be blamed for the loss of key clauses designed to combat “abusive and insulting” behaviour inciting religious hatred.
The reverses will have far-reaching consequences for Mr Blair and may hasten his departure from Downing Street. They will give heart to Labour rebels on the flagship Education and ID Cards Bills, making Mr Blair’s task of pushing through his reforms and ensuring his legacy even tougher.
To add insult to injury, George Galloway, the Respect MP expelled by Labour, voted for the Government while Mr Blair was absent.
Labour sources said last night that 20 to 25 Labour MPs had been dispatched to the Dunfermline and West Fife seat to campaign in next week’s by-election and were not recalled by whips because they thought that the majority was secure. The revelation will increase pressure on Ms Armstrong, especially as Mr Blair is considering a Cabinet reshuffle.
The Racial and Religious Hatred Bill was heavily watered down by 283 votes to 282 in the second most serious defeat for Mr Blair since the terror Bill last autumn. In an earlier vote, the Government was defeated on a technical measure by 288 votes to 278.
To a chorus of “resign” from Conservative MPs, Charles Clarke, the Home Secretary, told the Commons that he accepted its verdict and that the Bill would become law. But it was stripped of measures to outlaw “abusive and insulting” language and behaviour as well as the crime of “recklessness” in actions that incite religious hatred.
Had Mr Blair not left and the crucial vote been tied, the final decision would have fallen to the Speaker, who by convention would be expected to vote with the Government.
Home Office sources put a brave face on events. An aide to Mr Clarke said: “I still think we can get prosecutions, but obviously it does raise the bar.” The narrow defeat means that the Bill will become law with a series of amendments passed by the Lords designed to safeguard freedom of speech and meet the concerns of campaigners such as the comedian Rowan Atkinson.
The amendments restricted the new offence of inciting religious hatred to “threatening” words and behaviour rather than a wider definition covering insults and abuse.
They also required the offence to be intentional and specified that proselytising, discussion, criticism, insult, abuse and ridicule of religion, belief or religious practice would not be an offence. Ministers had urged the Commons to back a government compromise.
Earlier, hundreds of protesters had gathered outside Parliament to complain about the legislation’s impact on freedom of expression.
Dominic Grieve, the Shadow Attorney-General, said: “We are delighted with this outcome. The House of Commons has been willing to defy the Government, which is greatly to its credit. The Lords’ amendments are infinitely better than the Government’s proposals and protect far better the right to freedom of speech.”
Alistair Carmichael, the Liberal Democrats’ acting home affairs spokesman, said: “This is a good day for those who believe in the right to free speech.
“The strength and depth of the opposition shows just how unpopular this deeply flawed Bill was. Once again the Liberal Democrats have been at the forefront of opposing the unnecessary and ill-thought-out legislation brought forward by this increasingly authoritarian Government.”
Bob Marshall-Andrews, one of the Labour rebels, said: “It was an awful misjudgment to believe you could get a Bill like this through in the teeth of opposition from so many of your backbenchers.”
Mohammed Sarwar (Lab, Glasgow Central) said: “The Muslim community in this country will be very disappointed that Conservatives, Liberal Democrats and of course the rebels within the Labour Party have done this.”
THE REBELS
Joe Benton (Bootle)
Ronnie Campbell (Blyth Valley)
Colin Challen (Morley & Rothwell)
Frank Cook (Stockton North)
Jeremy Corbyn (Islington North)
Bill Etherington (Sunderland North)
Mark Fisher (Stoke-on-Trent Central)
Paul Flynn (Newport West)
Ian Gibson (Norwich North)
John Grogan (Selby)
Kate Hoey (Vauxhall)
Kelvin Hopkins (Luton North)
John McDonnell (Hayes & Harlington)
Andrew Mackinlay (Thurrock)
Robert Marshall-Andrews (Medway)
Gordon Prentice (Pendle)
Geraldine Smith (Morecambe & Lunesdale)
David Taylor (Leicestershire North West)
Rudi Vis (Finchley & Golders Green)
Robert Wareing (Liverpool West Derby)
Tony Wright (Cannock Chase)

Sam Coates's blog about Westminster, politics and spin
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