Fundamental changes to the way judges are appointed have been announced in an effort to attract candidates from a wider range of social backgrounds.
Lord Falconer says the moves will bolster judicial independence
The plans are among the first moves to abolish the historic office of lord chancellor.
Proposals for establishing a supreme court are included in a new consultation paper, which also says the elite rank of Queen's Counsel could be scrapped.
The plans, which the Conservatives say are "riddled with unanswered questions", will transfer many of the lord chancellor's powers to the new office of constitutional affairs secretary.
Lord Falconer currently holds both the old and new posts.
New short lists
The moves were one of a raft of proposals announced by the government as part of last month's cabinet reshuffle, and is designed to modernise the judicial system.
Now the government is publishing the detail and trying to stave off criticisms about its failure to consult with the public and experts before deciding to make the changes.
Under the plans, a short-list of judges would be drawn up by an independent appointments commission.
Their recommendations would be passed to the constitutional affairs secretary, who would have the final say.
Strathclyde predicted major regret if there were hasty reforms
An ombudsman will ensure that the process is fair.
Targets could be set for the number of judges who are women or from ethnic minorities.
Lord Falconer said "political correctness" should not override quality.
But he wanted to open up new career paths for the judiciary, so that people who left for a career break to bring up a family could apply.
Some believe there is currently a bias towards barristers when judges are appointed, and against women and solicitors.
There had never been a woman judge in the final court of appeal, said Lord Falconer, nor had there been a black High Court judge.
Lord Falconer told peers the independence of judges needed to be embedded "in a way that does not depend on one minister".
"We must consult widely and fully before deciding the detail of our changes," he said.
It was best to undertake reform from a "position of strength", he argued, rather than being forced into change as had happened in other countries.
A supreme court will be set up within 18 months: the 12 existing law lords will be members - but will lose the right to sit and vote in the House of Lords.
The new court will also decide disputes about the devolution system now in place for the UK.
The government also signalled the end of the state's involvement in appointing barristers as QCs, saying it needed "strong justification" for it to continue.
The moves are designed to further separate the state and the judiciary.
The lord chancellor currently sits as both a judge and a cabinet minister, leading to concerns of a conflict of interests.
Lord Strathclyde, the Conservative leader in the Lords, said the consultations should have been launched before the plans were announced in last month's reshuffle.
He asked why the changes were necessary when the UK's judges enjoyed a good reputation and were "not tainted by political interference".
He warned: "If the result of the most botched reshuffle in living memory should be botched and hasty legal reform, we should regret it for many years."
But there was support for the principle of the changes from Liberal Democrat spokesman Lord Goodhart.
"Law lords should not just be distinct in practice from the legislature but should be seen to be distinct," he said.
Many in the legal profession welcome the changes, but several leading figures in the judiciary have expressed concerns that the appointments committee should not be dominated by government "placemen".
Matthias Kelly, the chairman of the Bar Council, said: "We have a very high calibre judiciary which is not a 'career judiciary' and we should be very careful that any reforms do not dilute their quality or independence."
He also said the Bar Council would continue to lobby hard on the benefits of QCs, whose specialist skills helped the courts work more effectively.