Jack Straw has told MPs his plans are the "best opportunity" to reform the House of Lords for "many decades".
The Commons leader outlined details of a White Paper which proposes a House where some peers are elected and some still appointed, as they all are now.
The Lords could be renamed - with "the reformed chamber" an interim title.
The Conservatives said the plans would not make the Lords "more democratic", while the Lib Dems said "at least" 80% of peers should be elected.
Mr Straw said the reforms would increase the Lords' legitimacy and "strengthen democracy".
The plans, an attempt to end long-term deadlock, also propose cutting the number of peers from 746 to 540, and would see the end of hereditary peers sitting in Parliament.
'Vast range of views'
The White Paper - a document which puts government ideas to MPs for consultation before a final bill is drafted - does not propose removing Church of England bishops and archbishops from the Lords.
A 'hybrid' of elected and appointed peers
Reduce size of House from 746 to 540 members
End hereditary and life peerages over time
Elected peers to be voted in at same time as Euro elections
Maximum time in office of 15 years for elected and appointed peers
Appointees a mixture of party politicians and non-party figures
Lords may be renamed - possibly 'The Reformed Chamber'
Anglican bishops and archbishops to keep seats
Under its plans, elected peers would represent the same regional constituencies as those used in European elections, and be chosen using party lists and a form of proportional representation - "a partially open list".
A third of seats would be elected every five years, which means members being elected for 15-year terms.
The system would eventually mean the end of "life" peerages, with a third of appointees being replaced every five years and all serving a single term of 15 years.
No peers - elected or appointed - would be able to serve more than 15 years.
While there appears to be backing among MPs for an elected element in the Lords, there is no agreement on what proportion.
Tony Blair, when asked at prime minister's questions why he did not still support a 100% appointed Lords, said he had "always expressed concern about a hybrid House", but said he was willing to back proposals based on seeking a "consensus".
All parties are giving MPs a free vote on the issue.
At the moment all peers are appointed, apart from the 92 hereditary peers who survived the first phase of Lords reform during Tony Blair's first term in office.
A previous attempt to bring in elected members failed in 2003.
Mr Straw said he hoped to avoid a similar "train wreck" this time.
He said the "status quo is no longer an option", adding: "Deadlock this time round would be easy to achieve. The prize of progress means moving forward gradually and by consensus."
'Range of views'
MPs will be given seven options for reform: all elected; 80% elected and 20% appointed; 60% elected and 40% appointed; half and half; 40% elected and 60% appointed; 20% elected and 80% appointed; or all appointed.
In a controversial move, instead of going through the division lobbies, MPs will indicate their preferences in order on a ballot paper.
The least popular option will be knocked out and its second preferences redistributed until one option achieves a majority.
Mr Straw said he personally preferred 50% of peers being elected, 30% being appointed from part political choices and 20% from among non-party candidates.
Shadow Commons leader Theresa May said Mr Straw's proposals gave the government "more control of patronage".
She added: "With 30% of peers appointed by the parties, and 50% elected via lists controlled by the parties, these reforms will not lead to a more democratic and independent House of Lords."
But Liberal Democrat constitutional affairs spokesman Simon Hughes said: "In a modern democracy in the 21st Century, both Houses of Parliament must have elected people."
He said "at least 80%" of peers should be elected.
Lord Strathclyde, leader of the Tories in the Lords, warned: "This is a proud House. It doesn't deserve and will not brook another botched attempt at reform.
"The White Paper ideas are still not fully thought through and are unacceptable."
Scottish National Party leader Alex Salmond said Mr Straw's "hybrid House" plan was a "concoction of nonsense".
Research by the Hansard Society think-tank suggests only 6% of the public want a fully appointed House of Lords, with 82% preferring at least some elected members. It surveyed 1,980 adults.
The White Paper suggests the House of Lords might be renamed after it is reformed - what do you think it should be called? Add your suggestion using the form below.
It will probably always be known as the Upper House, but it should officially be called the Senate (populated by Senators). This name comes with a tradition reaching back 2000 years, and serves very well for the citizens of the USA and Canada, as well as for the citizens of many of our European partners (France, Ireland, Austria, Belgium, the Netherlands, Poland, Spain, Italy), and in nearly fifty countries around the world.
DM, Paris, Paris
Keep it the "House of Lords". This is a traditional name and we are loosing enough of our British identity without loosing something else. I say elect 50% and have the rst appointed but all should be classed as "lords" for the period they sit
Andew W, Falkirk, Scotland
The House of Lords! Why the need to rename (or change...)
Nick Delfas, london
House of Straw?
W George Preston, United Kingdom
Name should remain, Members should be 80% elected and all members should become Life Peers, even though only elected or appointed for 15 years. Hereditary Peers should be able to elect a small proportion from existing Hereditary Peers this would maintain continuity with our past history.
Alan Rumble, Balmaclellan, Scotland
Tony Mayer, Swindon
obviously - the House of Straw
Clive S, Crowborough
The Senate. And with the same number of senators as the US or Canadian Senates.
The House of Reform
Tom C, Oxford
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