The Conservative Party has said it will withdraw the whip from Conrad Black after he was convicted of fraud and obstructing the course of justice.
The Lib Dems want Lord Black stripped of his peerage
It means that former Telegraph proprietor Lord Black of Crossharbour will no longer be a member of the Tory group in the House of Lords.
A spokesman for the Tories was unable to confirm whether he would also be expelled from the party.
The Lib Dems are calling for Lord Black to be stripped of his peerage.
The media mogul was introduced to the House of Lords by ex-Prime Minister Baroness Thatcher in 2001 but he was nominated by then Tory leader William Hague.
He gave up his Canadian citizenship to receive the peerage after a court decision in his home country to block his acceptance of the award.
Following his convictions, the Conservatives issued a statement saying: "In the light of this verdict the Conservative whip will be withdrawn from Lord Black."
And the Liberal Democrats' justice spokesman David Heath insisted any members of the House of Lords convicted of serious offences should be kicked out.
He said: "Members of the House of Commons are automatically disqualified on conviction and there is no reason why the same rules should not apply to members of the Upper House.
"It is essential that a change in the law to that effect is included in the government's constitutional reform bill."
But journalist Andrew Neil, an old media acquaintance of Lord Black, said the ex-media baron was fiercely proud of his peerage.
"It could not be more important to Lord Black," Mr Neil told BBC Radio 4's PM programme.
"He owned newspapers in this country not just for reasons of political influence but because he wanted to climb to the dizzy heights of the British social system and being inaugurated into the House of Lords by Margaret Thatcher was an example of that."