The government has been defeated as peers voted to allow flexibility on the date of the referendum on changing the UK's voting system.
Under the coalition's plans, the public will decide on 5 May 2011 whether to adopt the alternative vote (AV) system in general elections, or stick to the first-past-the-post system.
But peers agreed on 6 December 2010 by 199 votes to 195, a majority of four, to support former Labour minister Lord Rooker's amendment to the Parliamentary Voting System and Constituencies Bill allowing the referendum to be held on any day before 31 October 2011.
During committee stage discussion of the bill, Lord Rooker argued that the referendum could still be held on 5 May, but his plan gave the government a "lifeboat" in case it was not possible to arrange it in time.
Lords leader Lord Strathclyde said that the government was committed to the May date as it would save money by being on the same day as local elections in large parts of the UK.
Conservative peer Lord Hamilton of Epsom, a former MP and minister, warned that the proposal was "extremely complex and not well understood by the electorate".
"We need a special day, I'm not too worried when it is after the elections on 5 May, but I think it should be on a separate day," he said.
He argued that if the referendum was going to be "all wrapped up in local authorities elections" it would be "very confusing indeed".
However, peers then rejected by 210 votes to 166, a government majority of 44, a separate Labour attempt to prevent the government holding the referendum on their chosen date.
Watch the second and third parts of the debate