The coalition has avoided fresh embarrassment over its plans for a new disability allowance after making concessions.

Paralympian Baroness Grey-Thompson's bid to force ministers to hold trials before introducing the controversial benefit was defeated by 229 votes to 213 on Tuesday evening.

The latest row over the Welfare Reform Bill comes after peers inflicted three defeats on the government last week over changes to employment and support allowance.

The proposed replacement of Disability Living Allowance (DLA) with a new Personal Independence Payment (Pip) aims to cut a fifth from spending on the benefit for working-age people.

It has sparked fierce opposition from groups representing disabled people, who warn that up to half a million may be forced into poverty.

Charities have demanded a "pause" in the legislative process to allow fuller consideration of the impact of the changes.

In the Upper Chamber, Lady Grey-Thompson argued there should be a review of the assessment plans and a trial period before Pip was brought in.

"There needs to be careful scrutiny of who will be affected by these changes," the crossbench peer said. "For me there's a real concern about whether it could lead to a deterioration of people's health."

Welfare reform minister Lord Freud warned that the delay caused by trials would wipe £1.4 billion off expected savings.

That was on top of a £3.8 billion bill for changes already secured by critics.

However, he said the government recognised the benefit of moving away from the "big bang approach" to implementation - which would see both new claims and assessments beginning in April next year.

Lord Freud promised tests of the operational processes, allowing officials to see how they worked without actually affecting claimants' entitlements.

The number of new claims for Pip will also be limited to a "few thousand per month" for the first few months of implementation.

Before the key vote was held, Lord Freud said the government would order two independent reviews of Pip, to take place within two and four years of its introduction.

An earlier amendment tabled by Lady Grey-Thompson, in which she argued that reports from doctors should be a mandatory part of the Pip assessment process, was withdrawn without a vote.

A Department for Work and Pensions spokeswoman said: "We welcome the outcome of tonight's vote.

"DLA is in need of urgent reform so that it can give people the support they need. Under Pip a greater proportion of people will be eligible for the higher rate of help than is the case under DLA.

"People understand that the welfare state needs to change and the introduction of Pip is an essential part of this process."