Peers have fired the opening salvo in a looming battle with the Government over controversial Brexit legislation that enables ministers to break international law.

Boris Johnson’s administration suffered a heavy defeat in the House of Lords with members backing by 395 votes to 169, majority 226, a “regret” amendment, condemning the contentious provisions and warning they “would undermine the rule of law and damage the reputation of the United Kingdom”.

With peers vowing to reject the disputed parts of the UK Internal Market Bill, it sets the scene for a showdown between the unelected chamber and Commons and the likelihood of protracted parliamentary “ping pong”, where legislation is passed between the two Houses.

The Archbishop of Canterbury Justin Welby, former Commons speaker Baroness Boothroyd and Conservative former leader Lord Howard of Lympne were among many in the upper house to criticise the Bill, which has already cleared the Commons despite opposition from some senior Tories.

The legislation sets out the way that trade within the UK will work once it is outside the EU’s single market and customs union.

But it also contains powers which gives ministers the opportunity to override the Brexit divorce deal, something the Government has acknowledged would breach international law.

A compromise reached in the Commons to head off a Tory backbench rebellion, which gives MPs a vote before the powers can be used, has been dismissed by some peers.

Lord Judge, a former lord chief justice, who proposed the critical “regret” amendment, said: “We cannot resile from the fact that we are breaking the law if this Bill is enacted.”

He was supported by opposition frontbencher Lord Stevenson of Balmacara, who hit out at the “egregious clauses” in the Bill.

The Labour peer argued the Government’s “pre-emptive action has placed the United Kingdom in the wrong” and damaged Britain’s “international reputation as a defender of the rule of law”.

He added: “When the history of these troubled months comes to be written it will not be kind to the current Prime Minister and his Cabinet.”

Liberal Democrat peer Lord Fox said: “We all know this Bill is illegal and we know it flouts important constitutional issues and threatens devolution.

“More than that, we know it has already eroded trust in our institutions and we know it is damaging the reputation of this country, which promotes the rule of law.

“Finally, and perhaps most insidiously, we know that any law that seeks to permit the executive to break laws is morally wrong.”

Responding for the Government, Cabinet Office minister Lord True defended the “limited, contingent proposals” in the Bill.

He said: “It does not accept that these safeguard provisions render our country, as has been claimed, an international pariah or justify, as was asserted, murderous actions by others. People are still talking to us.”

The Tory frontbencher added: “The rule of law is a great matter and the integrity of this Union is also a great matter. There is a balance to be struck in the context of these difficult times and proportion to be found.

“We believe that these measures, with all the safeguards, strike that balance without tying the hands of the Government at a critical time.

“What is potentially proposed is not an armed invasion of another nation, it is a contingent and potential power, subject to safeguards, which the Government has stated it hopes need never be invoked.”

Having received its second reading, the Bill faces a continued bumpy ride as it goes forward for detailed line-by-line scrutiny in the Lords.

Later analysis of the voting list revealed a significant Tory rebellion, with 39 Conservative peers defying the Government, including Lord Howard, former chancellors Lord Lamont of Lerwick and Lord Clarke of Nottingham, and Theresa May’s former chief of staff Lord Barwell.