The rejoicing by teacher unions, Opposition politicians and local authority associations which called the Lords' decision a "victory for common sense" could be short-lived as the Government intends to reverse the Lords' amendment in the House of Commons.
The peers voted by 92 to 58 to prevent the scheme going forward until there has been a full evaluation of phase one of the pilot voucher scheme currently being operated by four local education authorities (Norfolk, Westminster, Wandsworth and Kensington and Chelsea).
Don Foster, education spokes-man for the Liberal Democrats, said: "The scheme is already in difficulties and in the pilot areas there is clear evidence that many parents with a voucher will find no provision for their children."
The amendment of a Labour peer, Lord Morris of Castle Morris, could have delayed the nursery voucher scheme until after the election. Labour has pledged to scrap the scheme if it wins power.
Education and Employment Secretary Gillian Shephard said: "While we naturally take careful note of their Lordships' views, it remains our expectation to introduce nursery vouchers for all four-year-olds in England from April 1997.
"The scheme is firmly set on course for nationwide implementation. Delaying the introduction of the scheme would prevent over half a million children and their parents enjoying the benefits of a whole year of nursery schooling."
David Blunkett said he was prepared to work out a collaborative approach for delivering free nursery education to all four-year-olds next year, using both LEA and private provision, which would not involve vouchers - it would be paid for with the Pounds 185 million taken from LEAs to fund the scheme.
He said: "If Gillian Shephard doesn't take notice of our offer she'll have difficulty overturning the amendment and she has dissenters in her own ranks."
Iain Mills, Conservative MP for Meriden, has already voted against the Government on the Nursery Education and Grant-Maintained Schools Bill. He is concerned because Solihull, his local LEA, already provides more than 70 per cent of three and four-year-olds with Pounds 1,800 worth of high quality education. The vouchers are worth only Pounds 1,100.
He said: "I will be campaigning to have the Lords' amendment passed. I will also be pressing for an opt-out clause for high-performing authorities. The Government should not use the blunt tool of national legislation to bludgeon Solihull."
He said he was not the only MP on the Conservative benches who is unhappy with the Bill and added that the Government would have difficulty reversing the amendment without making concessions.
James Pawsey, chairman of the Conservative backbench education committee, said he would be doing all he could to have the decision reversed. Despite the Government's narrow majority, it can expect support from the Ulster unionist parties.
The Lords' debate followed a report on the volcanic eruption in Montserrat, and proved equally incendiary. Earl Baldwin of Bewdley (Independent) said: "In the matter of educational reforms over the past 16 years there has sometimes been a tendency to legislate first and do the thinking afterwards. Not surprisingly that has had some fairly unhappy results . . . Why must we rush yet another reform?" Lord Henley, education minister, said the Government had had a chance to evaluate the voucher scheme and could see no reason for delay.