MPs have rejected a bid by Conservative backbencher Andrew Tyrie to introduce a new type of peerage which would expire after a set period.
During debate on the Constitutional Reform and Governance Bill on 26 January 2010, Mr Tyrie's plan to create "term peers" was backed by the Tories and the Liberal Democrats, with shadow justice minister Eleanor Laing saying the idea was "helpful and illuminating".
Lib Dem spokesman David Heath told MPs: "This would be slightly better than what we have at the moment and any advance is better than none."
But Justice Minister Michael Wills dismissed the idea, claiming it would signal that there was no prospect of more fundamental reform.
He said: "I believe that if we sign up to these amendments here today we are sending a signal that we have given up all hope of radical reform of the House of Lords and I am simply not prepared to do that."
Mr Wills added: "We will be publishing draft clauses for that wholesale reform very shortly, and I mean very shortly - within a matter of weeks."
Mr Tyrie's bid to introduce term peers was defeated by 249 votes to 170, a government majority of 79.
MPs went on to approve government plans to enable peers to resign their seats in the Lords, and for Parliament to expel peers in exceptional circumstances, for example if they were found guilty of serious criminal offences.