Peers have voted against a Plaid Cymru amendment aiming to preserve the relationship between the government and Sianel Pedwar Cymru (S4C).
As report stage consideration of the Public Bodies Bill continued on 23 March 2011, Plaid Cymru peer Lord Wigley saw his amendment defeated by 197 votes to 162, a government majority of 35.
The amendment would have removed the ability to change the extent to which S4C is accountable to the government.
The government announced in the October 2011 Spending Review that the BBC would take over funding for S4C, the Welsh language television channel, from 2015.
The bill enacts reforms to public bodies announced by the Cabinet Office in October last year. The government wants to scrap, or merge, a large number of non-departmental public bodies in order to save money and improve accountability.
The bill initially gave ministers sweeping powers to scrap 150 bodies but these plans have been dropped in response to peers' concerns that the move would give ministers too much power.
Clauses allowing for the sale of England's public forests have also been removed, following a government u-turn on the proposed sell-off.
The legislation applies UK-wide.