THE House of Lords clashed with MPs last night by voting to continue fox-hunting under licence - the so-called "middle way" option.

The decision by 366 votes in favour to 59, followed an eight-hour debate in which peers were asked to choose from one of three options - an outright ban, hunting under licence or keeping the status quo.

In the other votes, peers rejected a ban by 331 votes to 74, and narrowly came down against the status quo option by 119 votes to 97.

However, it quickly emerged that peers on all sides had bowed to behind-the-scenes pressure to abandon their previous support last year for maintaining the status quo.

The result, on a free vote, came after MPs on Monday night voted overwhelmingly to ban the sport, the fourth occasion that they have done so since Labour swept to power in 1997.

Tony Blair also voted for a ban, the first time he has gone through the division lobbies as Prime Minister on this issue.

Now Parliament must wait to find out the Government's next move. It is expected that rural affairs minister Alun Michael will make a statement to the Commons tomorrow announcing that a new Bill will be introduced to Parliament.

But a question mark remains over the Government's strategy.

Government minister Lord Whitty told peers at the end of the debate that the Government did not have "a fully developed alternative approach which we are about to present to a surprised nation".

But he promised that ministers would take account of the views expressed in the Lords, Commons and with various interested parties.

A statement would be made to Parliament before Easter, said Lord Whitty.

If the legislation contains a single clause outlawing hunting, the Government can expect another battle in the Lords and huge demonstrations on the streets of London and other cities from countryside supporters.

Tory peer the Earl of Onslow warned the Lords that to reject the middle way option would be to invite ''one million people on to the streets of London''.

Yet for ministers to allow the middle way arguments to prevail would further fuel a backbench rebellion by Labour MPs, many of whom are running out of patience with what they see as the Government's dithering on the issue.