The Government defeated by 69 votes to 66 the Fine Gael-sponsored Courts 2000 Bill which proposed that the names of nominees for judicial appointment be referred to an Oireachtas committee before they are passed to the President.
The Bill also proposed the broadening of the pool of lawyers from which High Court and Supreme Court judges could be selected.
Ms Marian McGennis (Fianna Fail, Dublin Central) said the Government's forthcoming Bill would be far more wide-ranging than the Fine Gael Bill.