Lord Falconer is overseeing the reforms
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A deal has been struck with senior judges in England and Wales on plans to reform the legal system.
Tony Blair announced plans last year to scrap the post of lord chancellor and create a new Supreme Court.
The proposals sparked controversy, not least among judges, who claimed it could leave them vulnerable to political interference.
Ministers have now pledged to protect judges by enshrining the independence of the judiciary in new legislation.
Mr Blair unveiled the proposed reforms last June as part of his cabinet reshuffle.
His plans to overhaul the legal system took everyone by surprise, including the country's top judges.
The prime minister was accused of tearing up the constitution and failing to think through the reforms.
Agreement reached
In a statement to Parliament on Monday, ministers said they had now agreed a package of reforms with the judiciary.
Under the proposals, there will be a "statutory guarantee of the vital principle of the
independence of the judiciary".
The lord chief justice will be formally recognised as the leader of the judiciary and will be given the extra title of president of the courts of England and Wales.
A new judicial appointments commission will appoint judges "on merit". It will have a lay chair and most of its members will be from outside the legal profession.
All appointments will have to be approved by the secretary of state for constitutional affairs. However, his power to reject candidates will be "severely
curtailed".
Lord Falconer, the lord chancellor, said the measures would guarantee the independence of judges.
"The changes I am announcing today, which have been fully agreed with the
lord chief justice, provide for the first time ever a statutory guarantee of the
vital principle of the independence of the judiciary."
The Lord Chief Justice, Lord Woolf, gave his backing to the proposed new
arrangements.
"Once there is no longer a lord chancellor who is head of the judiciary, it is vitally important to the administration of justice that there are provisions in the legislation which protect the judiciary in their task of providing justice for those who come before the courts," he said.
"This, in the judgment of the judiciary, is what the proposals achieve."
Lord Woolf said he made his remarks with the support of the Judges' Council
and the senior judges of England and Wales.
However, shadow constitutional affairs secretary Alan Duncan criticised the proposals.
"This is a programme of reform that has no rhyme or reason to it," he told MPs.
"It risks creating no end of dangerous consequences and unforeseen conflicts."