TONY BLAIR was last night locked in a battle of wills with the House of Lords over the future of the Government's proposed anti-terror legislation.

The debate was continuing late into the night, with the Prime Minister ratcheting up pressure on his opponents.

At one stage, rumours swept Westminster that he would call a snap election if he was defeated.

The legislation needed to go through last night because Britain's existing anti-terrorism laws expire on Monday morning - leaving the country without protection.

Mr Blair insisted he would not bow to peers' demands that a "sunset clause" be inserted into the new law, which would ensure it would be reviewed in a year's time.

The peers had originally wanted the law to be reviewed in November but comprised by extending the deadline to 12 months.

The controversial law would allow those against whom there was a "reasonable suspicion" of terrorism links to have their liberties restricted.

The Lords also voted to reinstate a clause insisting the burden of proof should be those accused should only be subject to control orders if the "balance of probability" said they were linked to terrorism, rather than the "reasonable suspicion" clause approved by MPs on Wednesday.

But MPs last night again resisted changes. The Prevention of Terrorism Bill was sent back to the Upper House for peers to reconsider for the second time.

Mr Blair said of his opponents in the Lords: "They have simply got to understand: to continue to water down and dilute this legislation is not responsible. It is wrong. They should stop it."

He went on: "It is time to get serious. We are talking about an issue where the advice is clear. We need these powers."

He was speaking as Metropolitan Police Commissioner Sir Ian Blair warned of a grave threat to national security if ten foreign suspects detained at Belmarsh high security jail under the present powers were released without being subject to controls.

Earlier, the Prime Minister told the Cabinet that to have a sunset clause would "cast a pall of uncertainty" over the legislation.

The prime Minister's spokesman insisted the police and security services had said giving any kind of wrong signal to terrorists would be dangerous - and that could include a sunset clause.

The spokesman said the Government's advice was that "uncertainty is taken as a sign of weakness".

Tory leader Michael Howard said: "This Bill is full of imperfections - you don't need to take it from me. That's what Mr Blair's own minister said this afternoon in the House of Lords.

"I don't think it's in Britain's best interests for this Bill to become law permanently. If Mr Blair thinks it is necessary today, he can have it for a year. That would give everyone the chance to think hard about how best to tackle terrorism."

Mark Oaten, Liberal Democrat home affairs spokesman, said: "What the intelligence services and police are saying is yes, they want a form of control order.

"I have always accepted that.

"But it is for the politicians to ensure that when we have those control orders, we have them to the highest quality of the judicial process."