Ministers suffered a massive defeat in the Lords earlier this month when peers backed a low-cost arbitration service as recommended by Lord Justice Leveson. However, yesterday they agreed to drop part of the amendment requiring newspapers editors to seek independent regulatory approval before running certain contentious stories.

Tory former cabinet minister Lord Fowler acknowledged this went beyond the Leveson report and that pre-publication checks were an "anathema" to most journalists.

Lord Fowler, a former journalist who voted for the earlier amendment, said the part dealing with pre- publication advice was not necessary and created the wrong impression.

It was removed from the Defamation Bill without a vote. The Bill was given an unopposed third reading and now goes to the Com-mons where ministers are likely to try to remove the remainder of the amendment altogether.

Justice Minister Lord McNally said yesterday's change made an "un- acceptable position" only "marginally better".