British Prime Minister Tony Blair's government has suffered a defeat in the House of Lords this evening over the controversial issue of national identity cards.
The peers voted by a majority of 61 to overturn the government's plan and make the cards voluntary. The bill will now return to the House of Commons for further debate.
Both houses must reach agreement for the measure to become law.
Under British government proposals, the cards would not be compulsory initially. But anyone applying for or renewing a passport would have to pay for an identity card as well from 2008.
The Conservative and Liberal Democrat peers said this would introduce the cards by stealth and go back on Labour's original plan which was to have voluntary ID cards.
"The government should now look for compromise and go forward with the voluntary scheme they promised," Conservative Leader in the Lords, Lord Strathclyde, said in a statement.
"The issues of personal freedom involved are too important to be foisted on the public by half truths and deception."
It is the second time the House of Lords has voted against the cards. The House of Commons has previously voted in favour of the bill.
The cards - with data for fingerprint, iris and face recognition technology - are among the world's most ambitious experiments in biometric identification.
The government argues ID cards are essential to combat identity theft, abuse of the state benefits system, illegal immigration, organised crime and terrorism.
But critics say they are unworkable, costly and undermine civil liberties.