Crisis for Clegg as Cameron hints at Lords referendum

Nick Clegg's plans for an elected House of Lords have run into problems on several fronts as David Cameron left the door open to a controversial referendum and opposition mounted among MPs and peers.

The Deputy Prime Minister opposes a referendum on proposals for 80 per cent of the second chamber to be elected. But a joint committee of MPs and peers he set up to produce a blueprint for reform favour the public having the final say. Mr Cameron, while saying he personally opposed a referendum, did not rule one out.

On Sunday, Mr Clegg, pictured, argued a referendum was not needed because all three main parties pledged Lords reform in their 2010 election manifesto. Yesterday Mr Cameron told BBC Radio 4: "My view is that you shouldn't rule it out." And he said Lords reform would not happen unless the parties "work together, rationally, reasonably, sensibly".

But there was little sign yesterday of the splits between and within them being resolved. The joint committee ended up disagreeing among themselves.

Twelve of its 26 members issued an alternative blueprint, accusing Mr Clegg of not doing a proper job in his draft Bill because he dodged the critical issue of how a mainly elected Lords would affect the Commons. They warned that elected peers would challenge the supremacy of MPs and cause "gridlock" between the two Houses.

Ministers were also embroiled in a row after refusing to reveal how much the revamped Lords might cost. Unofficial estimates put the annual cost of running the new chamber at £177m in its first year and £433m a year by 2015-20. Mark Harper, the Cabinet Office Minister, dismissed the estimates as completely speculative.

Baroness (Gillian) Shephard, a former Tory Cabinet minister, was scathing in her criticism of Mr Clegg, saying he did not "do the work", "think through" his proposals and "deal with the vast constitutional implications" before bringing forward legislation.