Labour backbenchers have staged a rebellion against plans to liberalise Britain's gambling laws.

The government's majority was cut to just 74 in a vote on the second reading of the Gambling Bill last night.

Tories and Liberal Democrats were joined by 29 Labour MPs in voting against the proposals and many others abstained.

Speaking during the debate, culture secretary Tessa Jowell said she was open to new ideas.

"This is not the end of the story," she said.

Frank Dobson, the former health secretary, questioned why a Labour government was enabling American gambling interests to set up casinos in Britain.

He said: "It would be bad for our country, bad for hard-working families, bad for our party.

"It is the worst political combination: it is something that is both wrong and unpopular."