The UK Government has been defeated in the House of Lords as peers voted against allowing the decriminalisation of non-payment of the licence fee before 2017.

Ministers have set up an independent review in to the issue, due to report this summer, and want to keep open the option of taking swift action following it.

But peers voted by 178 to 175, majority three, in favour of a cross-party amendment to prevent any change before the next licence fee settlement begins in April 2017.

Tory peer Lord Grade of Yarmouth, a former chairman of the BBC, warned that "dark forces" were at work.

Lord Grade co-sponsored the successful amendment to the Deregulation Bill, which was backed by peers including Tory former cabinet minister Lord Fowler, Lib Dem former BBC children's television presenter Baroness Benjamin and Labour former EastEnders actor Lord Cashman.

Lord Grade said he was "deeply concerned" about the uncertain effect of decriminalisation on the BBC's budget.

He warned: "I would love to see the licence fee decriminalised, but there are risks in doing that.

"There are risks the enemies of the BBC will see it as an opportunity to then move the compulsory element of the licence fee and move the BBC to a subscription model which would completely undermine the whole concept of public service broadcasting. I think there are dark forces at work."

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