The government yesterday lost the first vote in its Health Bill’s latest hearing in Parliament, just hours after the prime minister had passionately reiterated the case for reform.

The Bill’s report stage hearing in the Lords started yesterday.

An amendment with cross-party support, but opposed by the government, was voted through by four votes. It changes a key clause on the health secretary’s responsibilities to specify they cover “physical and mental” health. Supporters said it would help give mental health a “parity of esteem” with physical health.

The change was supported by 167 Labour peers, 65 crossbenchers and three Liberal Democrats.

A Labour spokesman said it was a “symbolic” victory and suggested peers would challenge the government throughout the Bill’s report stage, which will continue until early-mid March. Critical votes on competition regulation in the NHS are expected to take place in early March.

Yesterday’s debate also saw health minister Earl Howe pressed on whether the Department of Health has a “Plan B” for the NHS if its bill falls. Labour health frontbencher Baroness Glenys Thornton said: “Millions of people in the health service have now expressed their view that this bill should not happen at all. Given that, do the government have a plan B in case they need to withdraw the Bill? Do they have people working on that in case the Bill has to be dropped?”

Responding, Earl Howe said: “In answer to the noble baroness, Lady Thornton, there is no suggestion that the bill could be withdrawn. We are clear that it is the right thing to do. Reform of the NHS is necessary and in the national interest, and the measures in the bill represent the best way forward.”

David Cameron told the Commons the overhaul was essential to ensure that everyone received the “amazing” care his family had.

The government has already accepted scores of amendments to the bill, including a guarantee that the health secretary will remain ultimately responsible for providing NHS services in England.

There are fears that the key issue of competition in the NHS may not be settled before next month’s Liberal Democrat spring conference.

Reports earlier this week suggested that the idea had been floated within Downing Street of inviting Labour’s former health secretary, Alan Milburn, to accept a peerage in order to replace Mr Lansley and take forward the job of reforming the NHS.

But Mr Milburn said he was not aware of any such offer and insisted there was “fat chance” of him accepting it and accused Mr Lansley of “bungling” the reforms, which will create a “patchwork quilt of complexity, compromise and confusion” that would leave the NHS even more centralised than before.

Shadow health secretary Andy Burnham said: “This Health Bill is an unfolding disaster for the government.

“The government is damaging frontline patient care with its top-down reorganisation of the NHS.”

Health minister Simon Burns insisted the government “had not made a mess” of the Bill.

He said Mr Lansley had a “total grasp of the workings of the intricacies of the NHS”.

Challenged over the scale of opposition from professional health bodies, he insisted many of the organisations supported elements of the reforms.

“Because of the size of the bill and the range of subjects being dealt with there are things that those organisations like, there are things that they don’t like,” he told BBC 2’s Newsnight.

He added: “A number of those organisations, like the Royal College of GPs, like the BMJ today, they have formed their opinions on surveys they have carried out which are self-selecting, they are of a very small minority of their members, you can vote as often as you like in these surveys to give distorted views, and then they have reached a conclusion, which is not representative.”