Coalition's first anniversary in power has been marred by a shock defeat on a flagship law and order policy.
Peers set the stage for a damaging parliamentary showdown by rejecting plans for elected police commissioners by 188 votes to 176 - a majority of 12.
Many had expected Liberal Democrat rebels to win amendments insisting that the controversial measures were piloted before full introduction. Deputy Prime Minister Nick Clegg had already indicated he supported slowing the process down.
They would have the power to hire and fire chief constables and set forces’ budget and “strategic direction”.
But under Lib Dem Baroness Harris of Richmond’s amendment, the chiefs would be chosen by a police and crime panel and not by the public.
She raised deep fears over plans that would pose “great risks to policing”.
It marked a turbulent first anniversary of the Coalition after Lib Dem leader Nick Clegg accused Tories of relishing the cuts George Osborne was pushing through.
The vote will still increase tensions between the Tories and the Lib Dems. The Conservatives are certain to attempt to overturn the defeat in the House of Commons.
Lib Dem MPs will then have to decide whether to cause more trouble for Mr Cameron.
Home Office minister Baroness Browning said: ‘The current model with police forces accountable to police authorities simply doesn’t provide the public with the mechanism for holding their police service to account.’
She added: ‘A singly elected representative means a responsive voice to local people, both visible and accountable – an elected individual charged with being the voice of some of the most vulnerable people, particularly those who are victims of crime.
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