A series of peers denounced the offence as pointless and said that its removal from the Terrorism Bill would still allow suspects to be charged with indirect encouragement to commit acts of terror. A move to strike glorification of terrorism from the Bill was carried by 270 votes to 144, a majority of 126, at its report stage despite government protests that the power was needed.

Ministers confirmed last night that MPs will be asked to reinstate the offence when the Bill returns to the Commons. But it means further controversy over a measure that has already been responsible for Tony Blair’s first Commons defeat, after plans to hold terror suspects for up to 90 days without charge were thrown out.

The proposal to outlaw glorification of terrorism was introduced after Mr Blair announced a series of measures to curb so-called “preachers of hate” and extremist websites, videos and publications in response to the London bombings last summer. Baroness Scotland of Asthal, the Home Office Minister, told peers: “The Government does not believe it acceptable that people should be allowed to make statements which glorify terrorism and in doing so make it more likely their audience will themselves commit acts of terrorism.”

Prosecutions would proceed only when it could be shown that a suspect clearly intended that others would reasonably infer that the terrorist acts in question were being glorified in order that they were to be emulated, Lady Scotland said.

It would apply only in existing circumstances, to prevent cases being brought in relation to historical acts of terrorism, and statements would have to be made publicly. Such tests were relatively easy to apply, the minister argued.

Lord Lloyd of Berwick, a crossbencher and former law lord who moved the amendment, said that the offence of glorification was unnecessary to meet international obligations, damaging to community relations and incompatible with Article 10 of the Convention of Human Rights guaranteeing freedom of expression.

He predicted that, if passed, it would be struck down by the appeal courts at the very first conviction.

Lord Carlile of Berriew, the barrister and Liberal Democrat peer who is reviewing the Government’s terrorist legislation, intervened to make clear he stood by his view that the Bill was a proportionate response.

But the move to strike out glorification of terrorism was backed by a succession of rebel Labour peers led by Lord Morris of Aberavon, the former Attorney-General, who called the proposed offence vague, unnecessary and extremely difficult to direct a jury on.

Lord Kingsland, for the Conservatives, however, supported the successful amendment, but said that he did so only because he thought the Bill was poorly drafted. He moved his own amendment, defining indirect encouragement of terrorism as making a statement describing terrorism in such a way that the listener would infer that he should emulate it. This was accepted by peers without a vote, despite criticism led by the Bishop of Winchester, the Right Rev Michael Scott-Joynt, that it was contradictory to support an offence of indirectly encouraging terrorism.

Another cross-party move to redefine the intent of those disseminating terrorist publications, by directly or indirectly encouraging terrorist acts or being reckless as to whether it would have that effect, was carried by 234 to 134 in a second defeat for the Government. It was the second time in consecutive days that the Lords inflicted defeats on flagship legislation, after peers forced through three changes to the Identity Cards Bill the previous day — one of which would delay ID cards pending a review of their costs.

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