Labour rebels joined opposition MPs to slash Labour's 66-strong majority to the lowest level since 1997 as they inflicted a crippling blow to the legislation just hours after Mr Blair insisted that the Bill was vital to protect Britain's security. He was criticised for accepting a similar amount when he resigned as Home Secretary last December and keeping the money when he was moved back into the Cabinet five months later. The Tories are also likely to demand that he moves out of his grace-and-favour residence in Belgravia, where he has lived since 2001.. After one of Mr Blair's darkest days since coming to power eight years ago, ministers fear the Prime Minister needs to convince his party he is in the driving seat. The past fortnight has been dominated by damaging cabinet splits over education and welfare reforms and smoking in public places.. David Blunkett's fall from power leaves him out of pocket in the short term, but - as his last resignation demonstrates - also opens up the option of increased extra-parliamentary earning power. The biggest financial impact of resigning is the drop in salary from £130,347 - for his cabinet minister post - to the £59,095 he receives as a backbench MP.

A payment of £18,700 given to ministers who quit will help his cash flow, although he is likely to come under pressure from opposition MPs to turn down the money. Tony Blair was battling to restore his battered authority last night after accepting the resignation of his close cabinet ally David Blunkett and surviving a Commons revolt against anti-terror laws by just one vote. "I am prepared to say that there are legitimate concerns and I will continue to discuss that issue," she told MPs. Charles Clarke, the Home Secretary, faced a second torrent of criticism as the Commons moved on to discuss plans to hold terror suspects for up to 90 days without charge. Mr Grieve said the plans were "at the outer limits of what would currently pass scrutiny under the European Convention on Human Rights".

He said: "Merely to say you can detain somebody beyond 14 days for the purpose of questioning strikes me as being really a very unpleasant concept." David Winnick, Labour MP for Walsall North, said that MPs should not introduce the 90-day detention simply because the police had requested it. "That does not seem to me to be right and not fulfilling the functions of the Commons." Shahid Malik, the Labour MP for Dewsbury, said that only 11 people had been held up to the current maximum of 14 days without charge - "there seems to be no example in the last two years of any one case where detention would be justified to 90 days".. We are doing what al-Qa'ida sought to do by other means and we will not be thanked by society for it," he said. Bob Marshall-Andrews, Labour MP for Medway, proposed amendments forcing prosecutors to prove intent when taking cases of alleged incitement to terrorism to court. He said Cherie Blair's famous statement of sympathy with Palestinians driven to resist the Israeli government would have been illegal under the "odious" proposed ban on glorifying terrorism." Hazel Blears, the Home Office minister, signalled a partial climbdown, denying that people could be charged with incitement as a result of their own negligence. "The far-reaching consequences of the Bill in its current form are so draconian as to virtually provide a Bill that could have been drafted for us by al-Qa'ida ...