David Blunkett is to lose his powers to set minimum life sentences for murderers.

The move follows a Law Lords ruling that the power infringes human rights legislation.

In a unanimous decision on Monday seven Law Lords ruled that the discretionary power contravened Article Six of the European Convention on Human Rights requiring jail tariffs to be passed by an "independent and impartial tribunal".

"I would declare that the statutory power now exercised by the home secretary to decide how long adult convicted murderers should remain in prison for purposes of retribution and general deterrence is incompatible with article six of the European Convention on Human Rights," said lord chief justice Lord Bingham.

"Put very shortly my reasons for reaching that conclusion are: that the decision in question amounts to the imposition of a sentence; that the imposition of a sentence forms part of a criminal trial; that a criminal trial must take place before a tribunal independent of the executive; and that the home secretary is not such a tribunal."

The test case was brought by three convicted killers, including double murderer Anthony Anderson, who was jailed in 1988.

Anderson claimed that the increase of his minimum prison sentence to 20 years - after the trial judge had recommended 15 - was a breach of his human rights.

Blunkett has pledged to pass legislation in this session of parliament clarifying the setting of minimum life tariffs.

"The House of Lords has today also declared my power to set tariffs for those convicted of murder incompatible with the ECHR. As I have said many times, my ability to set tariffs has ensured accountability to parliament within the criminal justice system for penalties attached to the most serious and heinous crimes," said the home secretary.

He said he would "study the judgement carefully" before finalising proposals to establish a set of principles within which judges will fix minimum tariffs.

And he is set to give up the power for the home secretary to set tariffs, handing the minimum sentence to judges.

"The judgement will affect only the issue of who actually sets the tariff in each individual case. As is proper in a democracy, parliament will continue to keep the paramount role of setting a clear framework for establishing the minimum period to be served."

In future the attorney general will have the power to appeal sentences where "aggravated" circumstances demand a longer term.

"The attorney general already has powers in relation to unduly lenient sentences and he will be able to challenge any minimum term which he considers is not consistent with those principles. These principles will set out that for the most serious crimes such as the sexual, sadistic murder of children, life should mean life," said Blunkett.

"The principles will be based on the same mitigating or aggravating factors on which I, and previous home secretaries have based our decisions. Aggravating factors will include murder committed in the course of armed robbery or the murder of prison or police officers in the course of their duty."

The new arrangements should bring government practice in line with human rights law, believes the home secretary.

"In respect of the ruling... our firm intention is that once we have the new arrangements in place a judicial authority will be able to consider afresh the tariff for any murderer at present serving a life sentence in accordance with the framework I have described," said Blunkett.

"This is the new system we are outlining today which should become law, subject to parliament, by autumn next year. We intend that any application by a serving prisoner for their tariff to be re-set would be heard under the new law. This will ensure that parliament has decided the framework for dealing with the most dangerous and evil people in our society."

Human rights campaigners have welcomed the Law Lords' ruling.

Liberty director, John Wadham, said: "It's a good day for impartial, fair British justice. Sentencing is part of the trial - and judges, not politicians, must be responsible for it in a fair system."

Wadham argued that allowing politicians to sentence will lead to trial by media.

"Politicians will always have one eye on how their decisions will look in the tabloid press and in the party's focus groups. Judges have the most information and the most independence, to make decisions that match the seriousness of every case, not just those in the headlines," he said.

The move came as Blunkett faced criticism for failing to tell parliament of his plans to impose long jail sentences on four notorious paedophiles.

Blunkett's move to set minimum 50 year tariffs for Roy Whiting, Howard Hughes, Timothy Morss and Brett Tyler was first announced in a tabloid newspaper that has campaigned on tougher sentences for child killers.

Whiting was convicted of the abduction and killing of Sarah Payne, sparking a high-profile News of the World campaign for tougher action on paedophiles.

The child killer's lawyers were understood to be ready to challenge a "whole life tariff" - confining Whiting to prison for rest of his life - under human rights legislation.

Decisions by home secretaries ruling that some murderers - such as Myra Hindley - should spend their entire life behind bars have been challenged in the European courts.

By setting 50 year sentences the convicted paedophiles can expect to die in jail, and Blunkett will be hoping to sidestep more embarrassing court cases.

Conservatives are calling on the home secretary to make a statement to the Commons.

Shadow home secretary, Oliver Letwin, said that Blunkett should be accountable to MPs rather than the media on the setting of tariffs.

"For those of us who wish to defend the continued power of the home secretary to set these tariffs, it is clearly of the utmost importance that the home secretary be seen to be answerable to parliament rather than to the media.

"I hope that David Blunkett will make a proper announcement to parliament tomorrow and will explain why he chose to use the media as the outlet for this particular announcement."

Shadow chancellor Michael Howard backed Blunkett's ruling but not the manner of its announcement.

"I think it probably is the right decision and I might very well have made the same decision had I been home secretary," he said.

"However I do not understand why this decision was announced on a Sunday rather than to parliament."

The former Conservative home secretary sparked controversy when he tried to extend the sentences of the James Bulger killers following a media campaign.

His attempt to raise the minimum time the murderers spent in custody was overruled by the House of Lords and later criticised by the European Court of Human Rights.

Howard accused Blunkett of playing a media game.

"I agree with David Blunkett that the home secretary should continue to have a role in deciding the amount of time that murderers should spend in prison," he said.

"That cause is undermined if serious decisions of this kind are announced as part of a news management agenda to divert attention away from the mess the government are in on the economy and the fire fighters dispute

"He is accountable to parliament, and not to Labour spin doctors. This is a serious and significant responsibility and it should not have been abused in this way."