The Blair government suffered an embarrassing defeat over its anti-terrorism Bill last night when the House of Lords backed a Tory move to erase its distinction between domestic and international terrorism.
If allowed to stand the amendment to the Anti-Terrorism, Crime and Security Bill would restore to the government the power to intern Irish republican dissidents as well as those foreign nationals being targeted by the Home Secretary, Mr David Blunkett .
The Home Office said they were considering "the best way forward" following the government's defeat by 149 to 139 during the committee stage in the Lords.
The government could use its Commons majority to throw out the Lords amendment. However, that would provoke fresh criticism from the Conservative leader, Mr Iain Duncan Smith, and the Ulster Unionist leader and Northern Ireland First Minister, Mr David Trimble.
Last night's vote followed their public break with the domestic political consensus last week when they denounced Mr Blunkett's Bill for a definition of international terrorism specifically excluding terrorism concerned with "the affairs of part of the United Kingdom".
In a joint article Mr Duncan Smith and Mr Trimble argued: "There could hardly be a more obvious device to exclude terrorist groups in Northern Ireland from parts of the Bill."
A Conservative spokesman last night said the issue was not primarily about the extension of internment powers to all parts of the UK but "one of principle concerning the creation of different classes of terrorism".
The Home Office Minister, Lord Rooker, said the government had wanted to remove domestic terrorism from the detention powers in the legislation because "we have got other ways of dealing with it". Labour removed the power of internment from the statute book in 1998 and resisted Conservative attempts to have the power reinstated in the Terrorism Act 2000.
The development came as the Prime Minister, Mr Blair, and the French President, Mr Jacques Chirac, and Prime Minister, Mr Lionel Jospin, met in Downing Street for their annual Anglo-French summit at which they discussed the military action in Afghanistan and the wider campaign against terrorism.
Earlier, Queen Elizabeth and Mr Blair joined 1,200 relatives and mourners in remembering the British victims of the terrorist attacks on the US at a memorial service in Westminster Abbey. Families of the estimated 80 British victims, former US president, Mr George Bush Snr, and members of the New York emergency services, took part in an emotional service.
In a powerful address to the congregation, the Archbishop of Canterbury, Dr George Carey, said there were no adequate words to describe the "shameful and evil" deeds carried out in the US. Those who claimed to serve God by carrying out the attacks, he said: "Besmirch the very basis of true faith." As a spiritual leader, Dr Carey said he acknowledged the religions of the world must take up the challenge "to put our own houses in order, so that we are never seen to be providing a religious mandate for acts of terrorism. We must build on the best of our faiths, not the worst."
Meanwhile, Mr Duncan Smith said Britain and its allies should be prepared to launch military action against Iraq if there was evidence that Baghdad was supporting international terrorism.