MPs have agreed without a vote to accept a Lords amendment to the Armed Forces Bill requiring the government to have regard for the effect of the operation of inquests on service and ex-service personnel.
However, MPs rejected a bid by peers to remove restrictions on wearing medals awarded by Commonwealth governments, by 263 votes to 216, a government majority of 47.
Defence Minister Andrew Robathan said the government would review the way medals were handed out, but claimed the amendment would effectively take power away from senior military figures and the Queen.
But shadow defence minister Gemma Doyle argued that this stance was unfair, telling MPs: "We cannot continue to have such anomalies of veterans being awarded a medal but not being given the right to wear it."
The Armed Forces Bill renews legislation that provides the legal basis for maintaining the Armed Forces, a task Parliament undertakes every five years.
It also places the military covenant, which promises a duty of care to the Armed Forces, on a statutory footing for the first time.
The bill now goes back to the House of Lords where peers must decided whether to accept the Commons' decision or overturn it. This stage is known as parliamentary ping-pong.