The lengthy T5 planning inquiry was used to justify the planning shake-up
The government has survived a Labour rebellion over plans to speed up the planning process for big projects such as airports and nuclear power stations.
A bid to ensure ministers get the final say on decisions by an independent body was rejected by 303 votes to 260.
More than 60 Labour MPs had signed a Commons motion warning that the new planning quango would be undemocratic.
In the end 17 Labour MPs defied the government. Ministers say the bill will speed up the planning process.
Communities Secretary Hazel Blears argued that big projects which could boost the economy and Britain's energy security were being "clogged up" in "antiquated" planning processes.
It was "unacceptable" that major projects such as the upgrade of the North Yorkshire power grid had taken just over six years to get through planning, while some wind farm applications had taken, on average, two years, she said.
"Our current system takes too long. It's immensely costly. It's almost impenetrable in very many cases to members of the public. There's a lack of transparency and a lack of clarity," she said.
"The system isn't working, needs to be brought up to date and made fit for the modern world we are living in."
In a bid to win over rebels, she said there would be a review of the commission after two years, with ministers intervening if there were problems.
The government would have to pre-approve specific sites for new nuclear power stations and airports before the planning commission could grant permission for construction in England and Wales.
And she said the public would have at least three opportunities to get involved in the process, through consultation before applications were examined and in being able to make representations during a public inquiry.
The rebels have also secured a promise of greater oversight by Commons select committees of the work of the Infrastructure Planning Commission.
The IPC will have to take account of a report by the local authority before a decision on a particular project is taken and there will be new rights for people affected by compulsory purchase orders.
But Labour MP John Grogan said the amendments would cause "massive confusion" and uncertainty for businesses.
He called for ministers to take the final decision within six months of planning approval being given by the IPC.
"These are tough and very controversial decisions - all the more important that they have democratic legitimacy," he said.
"Otherwise we are going to have a whole load of protests slowing-up these national infrastructure projects."
Shadow planning minister Jacqui Lait said the concessions did not amount to "a row of beans". She said ministers were quite capable of making decisions on major projects adding: "We do not need an unelected and unaccountable quango to do it for us."
For the Liberal Democrats, Dan Rogerson said that, while the planning system needed reform, there were "many helpful steps". He said: "The final decision must rest with someone who is accountable."
Sixteen Labour MPs rebelled in the vote and a 17th was a teller for the rebels.
A second Labour rebel amendment which would have let people make oral representations to the commission was rejected by 306 votes to 262.