THE Government was forced to climb down over plans to limit trial by jury last night in order to salvage its Criminal Justice Bill.

David Blunkett dropped measures under which complex fraud cases would be heard by a judge rather than a jury and other proposals allowing defendants to waive their right to a jury trial.

It was a day of high drama that saw the Government finally secure two major Bills with just hours to go before the official end of the parliamentary session.

John Reid finally got his way on the Health and Social Care Bill when the House of Lords dropped its opposition to foundation hospitals. Peers said that having seen the Government’s majority climb from 17 on Wednesday night to 41 early yesterday, it would give way and let the Commons have its way.

The health reforms, which give foundation trusts some operational and financial independence from Whitehall, have been divisive for Labour, triggering the biggest series of backbench rebellions for Tony Blair since 1997.

The Lords dug their heels in, however, over the Criminal Justice Bill, threatening to scupper the legislation if the Government did not back down on trial by jury. Hopes of a deal ebbed and flowed throughout the day, and MPs and peers accused the Prime Minister of interfering to block a compromise when he thought the Government had given away too much.

Negotiations between junior ministers and their shadows on a compromise formula, which ended late on Wednesday night, resumed early yesterday. Tories and Liberal Democrats thought they had secured a partial deal and believed that government officials had gone off to table compromise amendments with the House of Lords clerks.

They later discovered, however, that the same officials had returned to the clerks within minutes to withdraw the amendments. Opposition peers rejected important parts of the Bill and sent it back to the Commons.

The Government attempted to increase the pressure by threatening to postpone the end of the parliamentary session and force MPs and peers to come back next Monday and Tuesday to vote on the Bill. Mr Blunkett then arrived at the Commons to take charge of the negotiations himself, inviting David Davis, Shadow Home Secretary, and Simon Hughes, the Lib Dem spokesman, to his office for face-to-face talks.

After two meetings they agreed that, although measures to allow judges to preside alone over fraud cases would appear on the Act, they would not be implemented. Instead, the parties would explore other ways to deal with complex financial cases. The favoured option is to set up specialist juries to deal with fraud.

Mr Blunkett also agreed to drop a proposal to allow defendants to choose to have a judge hear their case. Officials said that it was never particularly important and was always just a useful “bargaining chip”. Thirdly, the deal has placed restrictions on when a judge can tell the jury about previous convictions. Under the deal juvenile convictions will be mentioned only if they were very serious.

In exchange, the Tories and Liberal Democrats dropped their opposition to allowing judges to hear cases when their is potential for jury nobbling. This is particularly important for cases involving organised crime.

There was some suspicion that Tony Blair had intervened to block the first deal, eager to cast peers in the worst possible light before the Queen’s Speech, which will strip hereditaries of the power to sit and vote. A Home Office official denied that this was the case, but confirmed that there had been a “full discussion” at the weekly Cabinet meeting.

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