The Conservatives have succeeded in their attempt to water down defamation laws which would have prevented large companies ranging from McDonald's to Tesco from suing their critics unless they could prove financial losses.
The Conservatives won a vote in the House of Commons to remove a House of Lords amendment to the defamation bill to tighten up the laws which critics say allow corporations to stifle free speech.
But during the Commons debate, the justice secretary Helen Grant promised to reconsider the amendment after the vote to get the support of the Liberal Democrats. But Labour denounced Grant's concession as a sham and it is almost certain the Liberal Democrat peer Lord Lester, who has led a three-year battle for libel reform, will move to reinstate the amendment when the bill returns to the Lords.
After losing the vote 298 to 230, shadow justice secretary Sadiq Khan said: "The government gave the impression there would be last minute concessions but this has proved false."
Labour MP Paul Farrelly said "the issue here is not just about big corporations which want to bully like McDonalds intimidating the little people just because they could … it's also about the desire of big businesses to silence its critics".
Tory MP Sir Peter Bottomley made an impassioned plea with his fellow politicians not to vote to remove this clause said that although case law had established, under the so-called Derbyshire principle, that councils could not sue, this did not extend to private companies such as Atos Healthcare, a company employed by the department of work and pensions, which has threatened disability blogs and websites with legal action.
Agreeing with Bottomley, Khan said: "Just because a school, prison or hospital is run by a private company doesn't mean it should be insulated from public criticism."
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