THE UK Government has suffered humiliation after going down to its first legislative defeat over pubs and beer.

More than 40 Tory and Liberal Democrat MPs rebelled to allow pub landlords to buy beer from whichever company they liked rather than that which own their premises.

A broadly-backed amendment to the Small Business, Enterprise and Employment Bill, signed by MPs from all three main parties, was approved by 284 votes to 259, a majority of 25. The Lib-Con Coalition's majority is normally around 60.

This is its first real defeat because it was the first time the Government lost a vote without collective responsibility being formally suspended.

Loud cheers from the Labour benches greeted the result while shouts of "resign" were also heard. An ironic shout of "well done, Chief Whip" was aimed at Conservative Michael Gove. There were reports that Business Minister Matt Hancock was seen grovelling to Prime Minister David Cameron following the defeat.

Almost half of Britain's 50,000 pubs are run by tenants under "beer-tie" agreements, which mean they buy beer from the firm that holds their lease at above market prices in return for subsidised rent or other benefits. Some publicans have claimed unfair treatment and very low earnings from such deals.

Government plans to allow publicans to challenge rental prices had ruled out a rent-only option that would let publicans buy beer on the open market, citing concerns that it could hurt companies and the industry.

The amended legislation, still has to pass through several parliamentary stages before it is enacted. The Campaign for Real Ale group said the vote was a landmark victory handing publicans more options.