Tony Blair's controversial education reforms cleared the Commons by 422 votes to 98 - a majority of 324 - after the Tories voted with the government.
Alan Johnson during a visit to a London school
Sixty-nine Labour rebels voted on Tuesday against plans for schools in England to become independent trusts free from local authority control.
This time, for the bill's third reading, 46 Labour members rebelled.
Education Secretary Alan Johnson said the result was "good news" for schools, teachers, parents and pupils.
"We cannot stand still on reform and the public agrees which is why we won the last election," he said.
"We were elected to improve standards in our schools and we are getting on with the job."
But Lib Dem leader Sir Menzies Campbell criticised the Conservatives for supporting a government which was trying to implement "poorly thought-out and ill-judged" proposals.
"The prime minister is in a hurry to create a legacy but risks leaving our public services in disarray," he said.
The Labour rebels on Tuesday included nine former Blair ministers, two of whom held Cabinet status jobs.
Meanwhile, a bid on Wednesday by Labour backbencher David Chaytor to abolish England's remaining grammar schools was defeated by 415 votes to 115.
The biggest sticking point concerning the plans is over the establishment of trust schools, which would give them more independence than schools currently have.
Opponents fear the reforms could create a two-tier education system.
A bid to force schools that want to go independent to ballot parents for approval to move to trust status was blocked on Tuesday by a majority of 291.
But rebel Labour MP John McDonnell said the scale of Tuesday's rebellion was "a crippling blow" to the bill.
KEY STICKING POINTS
Calls for local ballots on the creation of trust schools
Education secretary's veto on LEAs setting up community schools
Tory calls for all mainstream schools to have to stream pupils according to ability and aptitude
He offered to talk to ministers in an effort to find some middle ground which would allow it to get through without opposition support.
"For so many Labour backbenchers to rebel on this issue is extremely demoralising for the government. New Labour is in free-fall and the opposition is increasing, not declining," he said.
"This vote is yet another example of the government failing to listen to its own MPs, supporters and party members.
Labour's Louise Ellman, who voted against the government on Tuesday, said she would support the bill's third reading on Wednesday.
Ministers had earlier agreed to allow local education authorities (LEAs) to set up new community schools, but this can be vetoed by the education secretary in certain circumstances.
Mr Johnson also extended a further olive branch towards rebels by saying that applications, even from poor-performing LEAs, would be considered on their merits with "no presumption against consent".
However, he described calls for compulsory ballots as "unnecessarily bureaucratic" and "dictatorial".
He said that "rather than sounding the death-knell for local authority involvement in education, as some have suggested, if anything, this bill marks a re-birth of their role".
For the Conservatives, shadow education secretary David Willetts said they would continue supporting the bill as long as the government does not make any last-minute changes.
Once the bill completes its remaining stages in the Commons, it will then move on to the House of Lords for further consideration.