Libel reform campaigners said they were "delighted" overall that defamation reform was finally passing into law, although they were disappointed by the failure of a bid to bar private companies contracted to run schools, prisons or healthcare from suing ordinary citizens who criticised the work they do for the taxpayer.

However, the bill is a landmark piece of legislation and should provide more protection for individuals and organisations, including newspapers and broadcasters, which criticise big companies.

The new law will also stop cases being taken in London against journalists, academics or individuals who live outside the country, denting the libel tourism industry, but not ending it altogether, as foreigners will still be able to lodge claims in the high court.

Peers voted by a majority of 78 to pass the bill, which means it will now return to the Commons on Wednesday for formal approval with no possibility of fresh amendments.