Conservative rebels have failed in their bid to prevent ministers signing trade agreements with countries implicated in genocide.
The House of Commons voted 319 to 297, majority 22, to disagree with a Lords amendment to the Trade Bill.
This would have established a parliamentary panel of judicial experts to determine whether any proposed signatory to a trade agreement with the UK had committed genocide.
Instead, a further Government amendment to the Bill was approved.
Trade minister Greg Hands said this will require the Government to formally put in writing its position should any select committee publication raise “credible reports of genocide” in a country with which the UK is proposing a bilateral free trade agreement.
The division list showed 29 Conservative MPs rebelled over two votes in a bid to stop the removal of the Lords genocide amendment. They included former foreign secretary Jeremy Hunt.
The Government has been engaged in a long-running battle with some of its backbenchers and the Opposition over the issue given concerns about China’s treatment of its Uighur minority in Xinjiang province.
Mr Hands had urged MPs to defeat the Lords proposal as it “blurs the distinction between legislative and judicial and runs contrary to Government policy that is for competent courts to make determinations of genocide”.
But Conservative former party leader Sir Iain Duncan Smith said he was “sad” the Government had not compromised on the matter.
Ahead of the vote and amid concerns over the treatment of the Uighur people, Sir Iain said MPs had a chance to “send a message” that “we simply won’t put up with this”.
He said: “We’re not frightened of finding that this is genocide and we’re not frightened of saying it from the steeple-tops. We know that what we have to do is stand up for those who have no voice.
“This chamber has a history of doing that, it has an opportunity tonight to do that and I am sorry that my Government who I hugely respect doesn’t think they can do it.”
Conservative former minister Nus Ghani added she could not support the Government’s amendment, telling MPs: “The Government amendment only applies to countries which are formally negotiating a free trade agreement – the genocide amendment excludes the Uighurs.
“Considering everything that has been said today, I really think this is a shameful way to deal with our international and national responsibilities, that fundamentally sends the message that we have a two-tier system in place.”
But Sir Bob Neill, Conservative chairman of the Justice Committee, said there remained “difficulties” in the Lords amendment given the involvement of judges in political decisions.
The Trade Bill is now on the verge of becoming law following a lengthy parliamentary process known as “ping-pong” in which it moved between the Commons and Lords following amendments.