The Ministry of Justice carried out a fast-track consultation on cutting success fees by 90 per cent but the changes, which needed parliamentary approval, were held up last week when they were voted down at the committee stage.
Four Labour MPs joined opposition parties in voting against the order. The MPs argued that the move could deny access to justice to people of modest means who felt they had been libelled but may be unable to find lawyers willing to take on their case.
Justice secretary Jack Straw said last week he was hopeful the changes would still go through before the general election. He said: "I think there was quite a lot of misinformation about it and what they were arguing is if the maximum bonuses from winning a defamation action were cut from 100 per cent to 10 per cent defamation lawyers would refuse to act.
"The ten per cent figure was not plucked out of thin air; it was done on the basis of some quite sophisticated calculations. What I am saying is, whether it's 100 per cent or ten per cent does not make that much difference to the finances of the very big national and international media chains, but what it affects is local papers."
But following Prime Minister Gordon Brown yesterday calling an election for 6 May, the CFA rule-change will not now have time to pass into law. Bob Satchwell, director of the Society of Editors, said last night in an email to members: "Despite splendid personal lobbying efforts by editors, sadly the reform of CFAs has fallen at the last hurdle because of backbench MPs' interference for a variety of reasons and a failure to convince government whips that they should provide time for debate.
"We have presented an overwhelming case that has been accepted widely. We may only speculate on the motives of those with vested interests or at least vested grudges against parts of the media. The irony is that by opposing a sensible reform on the grounds that it might be have some interest for News International or the Daily Mail, their actions in fact continue to damage the parts of the media of which they approve."
Dominic Ponsford is the editor of Press Gazette.