BBC Political Correspondent Carole Walker reports on Tories warming to a Labour deal

Mr Hague sacked the Tory leader in the Lords, Viscount Cranborne, on Wednesday for apparently agreeing to the plans during secret negotiations with Labour.

The arrangement would have allowed the government to push through its reforms for the House of Lords which plan to abolish the right of hereditary peers to participate in parliament.

William Hague revealed the secret deal to the surprise of Labour MPs

But Mr Hague said Lord Cranborne did not have the right to make a deal on his behalf.

Conservative peers were in open revolt after Lord Cranborne was booted out by Mr Hague.

And only hours after the sacking Mr Hague said he now welcomed the proposal and would not oppose it.

The newly-appointed Tory leader in the Lords, Lord Strathclyde, also said the proposal was a good deal and if it was brought forward, the Tories would grab it.

The agreement had been kept secret and was only revealed by Mr Hague during a dramatic Prime Minister's Questions clash.

He insisted his party had rejected the deal and accused the government of a "huge climbdown" that showed Prime Minister Tony Blair had no principles on the matter.

Tony Blair hit back accusing the opposition of being split on the issue

But Mr Blair hit back, claiming the deal had been done with Lord Cranborne, proving Mr Hague was not in control of his own party.

And, in a defiant meeting after the Commons showdown, Tory peers lined up to support Lord Cranborne just minutes before William Hague sacked him for his disloyalty.

Speaking shortly afterwards, Lord Cranborne said he thought at the time he was doing the right thing, but admitted he had "behaved quite outrageously".

Lord Cranborne: I thought I was doing the right thing

He said he had "exceeded his authority and gone behind his leader's back".

But he added: "In any conflict between loyalty to the party and loyalty to this House, my judgement must be about what I think is best for the future of this House."

Lord Cranborne: Sacked by William Hague

Mr Hague, in a letter to the sacked peer, declared: "It can never be acceptable for a member of the front bench to seek to bring about a change in the policy of the party without the knowledge or agreement of the party leader or the shadow cabinet."

He also praised Lord Cranborne for doing a "remarkable job" and said it was a "matter of deep regret to me that today's differences should have arisen".

But the issue was dividing the Tories with unrepentant Lords pledging to stick to the deal and praising Lord Cranborne's actions.

Lord Kimball said the sacking meant Mr Hague did not have a front bench in the Lords.

He was backed by several Tory peers and crossbenchers in declaring that the deal was good one and had been worth pursuing.

The shadow cabinet met later and issued a statement declaring its wholehearted opposition to the agreement and again accusing the prime minister of abandoning his principles.

BBC Political Editor Robin Oakley: There's a real tension now between Tory peers and MPs

The government is committed to abolishing the rights of all 750 hereditary peers to sit and vote in the House of Lords.

The government feared the Tories could use their inbuilt majority in the upper House to block the proposal and throw its parliamentary programme into disarray with guerrilla warfare over the issue.

Ruined it all

The deal was to be announced on Wednesday afternoon by crossbencher and former Commons Speaker Lord Weatherill, who had helped broker it. The government was then set to announce its support for the proposal.

William Hague: There was no deal

But Mr Hague ruined all that by revealing its existence during Question Time and declaring the Tories were against it.

His spokesman later insisted the deal had been on the cards for weeks and a meeting of senior shadow cabinet members - including Lord Cranborne - had agreed the week before the Queen's Speech to reject it.

Tony Blair: Lord Cranborne had appeared to accept the details of the deal

Lord Cranborne had been happy to accept the government's line, he said.

But Labour were equally adamant that the deal had been done and that Mr Hague did not know what his own peers were up to.