01/02/2012 08:28 GMT | Updated 02/04/2012 06:12 BST

Welfare Reform: Bill Back In The Commons (LIVE UPDATES)

MPs have voted to overturn all the key Lords amendments to the Welfare Reform Bill, with eight Liberal Democrats rebelling over government plans to remove some benefits from cancer patients and severely disabled people.

Three amendments on Employment Support Allowance (ESA) were rejected by MPs in line with the government's majority in the Commons, with Labour opposing the restrictions for ESA on disabled people. Later MPs overturned a further Lords amendment to the government's controversial benefit cap, which the Lords have revised to make child support allowance exempt.

The vote was significant because it was the first time Labour actually gave an indication in the Commons on its current view on the benefit cap - they have been unwilling to comment on it despite taunts from David Cameron about where they actually stand.

The final vote at 7:45pm was comfortably won by 318 - 257, in line with similar majorities for the government. The Welfare Reform Bill will now return to the Lords at an unknown date, possibly on the 15th of Febuary when the Commons will be in recess.

The government has indicated that if the Lords fail to back down, it may invoke "financial privilege" on the Bill, meaning that the Lords can't debate it any further because it has been classified as a "money" Bill. Labour has indicated it will seek legal advice on whether the government can do this.

Earlier Chris Grayling challenged Ed Miliband to support the government as they sought to overturn the Lords changes to the Bill, including on a £26,000 per-year benefit cap and charging single parents to use the Child Support Agency.

The government is adamant it will seek to overturn the amendments made by peers - although IDS has revealed one concession, a nine month transitional period for families affected by the benefit cap.

"Ed Miliband claims Labour support the government's cap on benefits. But last week he tried to wreck it in the Lords," the employment minister said. "So if he is serious about tackling the something for nothing culture, he will u-turn on his decision last week and back the Government's cap on benefits in full."

Tuesday saw the government's seventh Lords defeat on the Welfare Reform Bill, this time over the amount paid to children who are receiving the lower rate of Disability Allowance (DLA). However the government is expected to use financial privilege on some amendments to get them through parliament.

Shadow work and pensions secretary Liam Byrne has said while Labour supports the benefits cap, it should be changed depending on where people live.

"We think there should be an independent commission to take the politics out of this, and that there should be different levels in London to the rest of the country. We think you should take into account different levels of housing benefits. This isn't about a difference of wages. We have had a localised part of the welfare system for nearly 70 years now that hinges on housing benefits."

A Labour source said while the party supported bringing down the cost of benefits to the taxpayer, "the point of opposition is to oppose."

If there's no agreement, the government can choose to invoke the Parliament Act to over-ride the Lords and pass the Welfare Reform Bill into law. But the technicalities of this mean it can only be done in the next session of parliament - that's after the Queen's Speech expected in May.

The Lords amendments overturned on Wednesday in full:

Highlights from today's debate below: