Students would pay higher tuition fees if the Bill becomes law
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Nine Welsh Labour MPs were among the 71 rebels who voted against the government's controversial plans to introduced university top-up fees.
One other Welsh Labour MP - Alan Williams, the MP for Swansea West - abstained as Tony Blair's government survived the closest Commons vote of his premiership - by 316 votes to 311 - over the Higher Education Bill.
It followed frantic last-minute campaigning against the rebel MPs by government whips and ministers.
It means the bill has passed its first major test but will still face more hurdles as it goes through the parliamentary process.
The bill which would allow universities in England to charge students £3,000-a-year, payable when they earn £15,000.
After the vote one Labour rebel, the Blaenau Gwent MP Llew Smith told BBC News 24: "I think we would have won 24 hours ago but supposedly some people changed their mind because of concessions made."
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THE NINE WELSH LABOUR REBELS
Llew Smith
Jon Owen Jones
Julie Morgan
Denzil Davies
Dai Havard
Paul Flynn
Martin Caton
Ian Lucas
Albert Owen
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But he said the result, by the narrowest margin of his premiership, had left "Tony Blair a very weakened prime minister".
"There is a considerable amount of disillusionment as far as the electorate is concerned and this is another reason why people are leaving the Labour Party in droves"
But Rhondda MP Chris Bryant, who supported the government, told BBC News 24 it was "a really good deal."
"The truth is in the end a lot of Labour backbenchers have helped to
make this a better bill."
"I'm pleased because I think in the end this is going to put more
money into universities."
Concessions
Rebels had argued that concessions made by the government fail to go far enough and that the concept of universities charging variable fees is unacceptable.
They said the proposal is contrary to a pledge in Labour's 2001 manifesto not to introduce top-up fees.
But supporters of the bill argued that government concessions will allow more students from working class backgrounds to go to university, with new bursaries and grants to fund their studies.
There is also a provision in the Bill to transfer student funding powers from Westminster to the Welsh assembly.
Assembly Education Minister Jane Davidson said: " I very much welcome the decision of the House tonight to support this Bill which brings devolution to Wales.
"Decisions affecting Welsh students and Welsh Institutions should be made in Wales not in England - the Bill will enable us to do just that."
The four Plaid Cymru MPs and two Welsh Liberal Democrats planned to vote against the Bill.
Ceredigion MP Simon Thomas, Plaid's education spokesperson, said: "There is no doubt that this bill will be a disaster for higher education in Wales and a disaster for Welsh students."