Ministers are considering a major climb-down over proposals to give new rights to agency workers.

The Government last night was deciding whether to block a Private Member's Bill aimed at giving agency workers the same wages, holiday entitlement and sick pay as other staff.

Wolverhampton MP Pat McFadden, the Minister for Employment Relations, has the difficult task of representing the Government in today's Commons debate.

When similar proposals came before Parliament last March, ministers blocked them by "talking the Bill out".

If the same approach is taken today, Mr McFadden will be forced to get to his feet and make a speech which lasts so long that there is no time to vote on the Bill - a tactic commonly used in Parliament, but nonetheless guaranteed to upset his Labour colleagues.

But there is growing speculation that Gordon Brown will decide to let the proposals proceed into law, rather than upset the Labour backbenches.

More than 100 Labour backbenchers are believed to support the Bill, and to be ready to defy instructions from the party leadership by backing it in the Commons.

West Midlands MPs who have publicly announced their support include Richard Burden (Lab Northfield) and Lynne Jones (Lab Selly Oak).

However, employers claim the proposals would lead to the loss of more than 250,000 jobs.

The CBI claimed firms would simply stop using agency staff and fill staffing gaps in other ways, such as asking staff to do more overtime. But unions have demanded that the Government accept the Bill, and accused it of paying too much attention to the demands of business Brendan Barber, general secretary of the TUC, said: "Once again the UK Government is on the edge of Europe, arguing that the economy can only succeed if British workers get fewer rights than those in the rest of the EU."

A "significant number" of agency workers were being exploited because of the lack of legislation on their employment, he claimed.

The Temporary and Agency Workers (Equal Treatment) Bill, sponsored by Cheshire Labour MP Andrew Miller, is scheduled to receive its second reading on the Commons today. It has been backed by 154 MPs, most of them Labour, as well as by trade unions.

Although the Government would be able to block the Bill if it chose, it is believed ministers have decided the strength of feeling is so strong, at a time when the Government is already facing a series of difficult challenges, that there is nothing to be gained by picking a fight with Labour backbenchers.

If it is approved, the Bill will go into committee stage where it could be amended to ensure the concerns of business are taken into account.

However, Mr Miller and the Bill's supporters could face opposition from Conservative MPs.

The Tories have been happy to stay out of the battles over the Bill when these involved the Government fighting its own MPs, but could try to block it when there is a real chance of it being passed.

Mr McFadden (Lab Wolverhampton South East) will represent the Government in today's debate.