The Government is set to reject key amendments to the Legal Services Bill in a move that looks certain to stoke mounting unrest in the legal profession.

The amendments, which were put forward by the House of Lords and backed by all corners of the legal profession, will be discussed in the Commons this month, but ministers have said the Government will reject attempts to limit its powers to make appointments to the new Legal Services Board.

The Lords' amendments would have obliged the Lord Chancellor to make appointments to the Legal Services Board with agreement of the Lord Chief Justice. Lawyers have argued that the profession needed the provision to safeguard its independence.

In a letter to Ed Balls, economic secretary to the Treasury, the senior partners from all five magic circle firms, as well as
Bar Council chairman Geoffrey Vos QC, argued that the perceived lack of independence of the Legal Services Board risked undermining international confidence in the UK legal services market.

Another amendment backed by lawyers, which is also set to fall by the wayside, is the delegation of complaints-handling to the Bar Standards Board (BSB).

Vos told Legal Week: "I am extremely disappointed. The Lords' amendments were carefully thought out and would have been very beneficial."

He added: "Overall, it is a good Bill but there are aspects that need some adjustment. We have been prepared to listen and the Government should be too."

BSB director Mark Stobbs added that the BSB and the Bar Council would continue to lobby for the right to handle complaints. The Bill will be passed back to the Lords in the autumn after the Parliamentary recess.

However, lawyers did score a victory lobbying the Government earlier this week with a Law Society-backed effort forcing a re-think over draft money laundering regulations.

On Monday (4 June), the Treasury said the new regulations, which aim to bring the UK into line with the European Union (EU) Third European Money Laundering Directive, would now be redrafted.

The move followed a warning by the Law Society and City partners that the new regime would deter foreign investment in the UK.

Additional reporting by Claire Ruckin.