The government confirmed in the Queen's speech it planned to push ahead with its commitment to remove voting and sitting rights from all hereditary peers in the Lords.

But Prime Minister Tony Blair has refused to offer any view on what might replace the majority of the UK's upper house until he receives a report by a royal commission.

The Conservative opposition has seized on this as evidence of their belief that Labour intends to create an unaccountable, appointed body in place of the Lords.

They have described the royal commission as the prime minister's "poodle". The appointment of Lord Butler is intended to quash such claims, according to The Financial Times.

Mr Blair worked with the former Cabinet secretary during the 1997 general election. Sir Robin Butler, as he was then known, had the responsibility of ensuring the handover of power from the Conservatives to Labour went smoothly.

As a career civil servant, Lord Butler's views on the role of the House of Lords are not publicly known.

Mr Blair is understood to favour a largely government appointed upper chamber, with only a small elected element.

At present, the government will only confirm Lord Butler is "a strong contender" for the job of leading the royal commission that will report on the future of the Lords.

The shape of the commission will be confirmed early in the new year and it is expected to complete its inquiry and issue its recommendations within 12 months.