Lord Archer is to lose his peerage and be banned from sitting in the House of Lords under reform plans unveiled by the government on Thursday.
Archer: Ex-deputy Tory chairman
The last remaining hereditary peers will also be axed from the House of Lords under the reform plans outlined by the Lord Chancellor Lord Falconer.
Lord Falconer said the intention was to strip peerages from those convicted of a criminal offence - and added that the measure would be retrospective.
The news came on the day Lord Archer, a former Conservative Party deputy chairman, made his first public speech since being released from prison.
Ex-Tory cabinet minister Jonathan Aitken, who has also served a prison sentence, described the decision to make the measure retrospective "petty, spiteful and vindictive".
But Lord Falconer later told BBC Radio 4's World at One programme, the move to ban ex-convicts was "a matter of principle".
"As a point of principle should somebody who's been convicted of a criminal offence and sentenced to a year or more in prison be somebody who should sit in Parliament?" he said.
He denied that the retrospective nature of this proposal was vindictive.
Lord Archer was released from prison in July after serving two years of a four-year sentence for perjury.
The wider plans for the next stage of Lords reform includes the creation of a new independent appointments commission, which would end the prime minister's powers of patronage.
The announcement from Lord Falconer comes after the last reform plans were left in chaos when peers and MPs failed to agree on any of eight options put to them.
The rights of hereditary peers to sit in the House of Lords were scrapped in 1999 but 92 hereditaries were allowed to stay on until the reform programme was complete.
Earlier this year, in a series of complex votes, MPs and peers narrowly rejected plans for a mostly elected upper house.
That vote included defeat for the prime minister's favoured option of an all-appointed second chamber.
Since then, a joint committee charged with examining the issue of Lords reform has said it would examine at least removing the remaining 92 hereditary peers.
It has been waiting for the government's own proposals.
Mr Blair hopes the promise of an independent appointments commission, ending prime ministerial powers of patronage, will end charges that he wants to fill the upper house with "Tony's cronies".
Conservative Lords Leader Lord Strathclyde, one of the 92 remaining hereditaries, was worried the appointments' commision would be designed to suit the government of the day.
He told BBC Radio 4's Today programme he was worried the plans are "fundamentally about rigging the Lords, fixing the votes so that it suits the government more... they are going to make it seem as if they
own the British constitution and they know best."
Lord Strathclyde said the hereditary peerage had come to an end in 1999 but removing the last hereditary peers would end any serious Lords reform efforts.
There was criticism too from Meg Russell, of think-tank the Constitution Unit.
"Since the hereditary peers are ironically the only elected members of the House of Lords, it is hard to claim that removing them makes the chamber more democratic."
Campaign group Charter88 said it would be a bad day for UK democracy if the limit of the next stage of reform was the removal of the remaining hereditary peers.
"The reality of democracy under Blair is government of the few and by the few. Tony's cronies continue to rule."