The prime minister supports the creation of a new committee of MPs and peers to look at options for reforming the second chamber, Number 10 has confirmed.

Over the weekend it was suggested that Blair favours indirect system of appointment.

This could be done on either the basis of general election results or through peers being elected by regional assemblies and the devolved institutions.

In a bid to secure parliamentary support for legislation removing the remaining hereditary peers this session, MPs appear set to be offered a third phase of reform.

It is thought that the committee's membership could be announced within days.

"Essentially we are keen to see the joint committee set up again so it can consider issues in relation to House of Lords reform," said the official spokesman.

"The committee is currently not being set up - we are working for it to be set up."

According to Westminster sources, Jack Cunningham, who chaired the first joint committee, is prepared to head the new group of MPs and peers.

But it is thought that senior Tories such as Kenneth Clarke and William Hague will refuse any invitation to revive the committee.

No verdict

The previous committee set up by the government came up with a range of options for change - but MPs failed to agree on a final verdict.

Both the Liberal Democrats and the Conservatives favour a directly-elected second chamber.

But the government fears this would become a threat to the Commons supremacy.

Downing Street said the system of appointees was still under consideration but options remained open.

"It is something we would like the committee to explore," said the official spokesman.

"If the committee were to be set up then this would be something that could be discussed by it. It is difficult to get to that point of favouring one option over another."