Lord Bates, a shadow local government minister, was due to table an amendment in the House of Lords on Monday seeking to end a furious row over retrospective rates.

The Valuation Office Agency – an offshoot of HM Revenue & Customs – decided last year that it had undercharged port companies and backdated rates to April 2005. It left port companies with extra bills topping an estimated £200m, putting 1,600 companies and 150,000 jobs at risk.

Lord Bates' amendment sought to clarify that where a mistake had been made, those responsible would pay – and there would be no backdating.

However, the Government has tried to block debate on the amendment by invoking a "privilege amendment".

"It is incredible," Lord Bates said last night. "With jobs being lost in our recession-hit ports, that this out-of-touch Labour Government should resort to underhand parliamentary tactics."

The Government last week used its Commons majority to overturn a Lords amendment on the rates issue, though Labour rebels included Louise Ellman, chairman of the Transport Committee, Austin Mitchell, MP for Grimsby, and Birkenhead MP Frank Field.

David Johnson, the finance director of RMS Group Holdings, has written to unelected Business Secretary Lord Mandelson, describing the Government's latest move as "Stalinist".