Lord Lucas asked fellow peers to vote against Section 17, while Lord Razzall said that the clause "gives the government the power to alter copyright law by statutory instrument and should be rejected".
"I think if we are going to alter copyright law it has to be done by primary legislation, rather than statutory instrument," he added.
Lord Mandelson pre-empted criticism of Section 17 in his opening address to the House by claiming that it had been included to reflect the ever-changing nature of the digital market, and that "such a power should not and will not be used lightly".
"That is why any use of the power would require full public consultation followed by approval of both Houses of Parliament, and why we have provided explicitly that the power may not be used to create or modify criminal offences, " he said.
Lord Mandelson also outlined his reasoning for the controversial three strikes disconnection policy, insisting that it would be used only as a last resort.
"Infringers would have clear and ample warning of the risks they appear to be taking, and will have been advised clearly on how to access material legally," he said.
Lord Mandelson added that there would be a clear and independent route of appeal during any disconnection process, including to a first-tier tribunal.
The Lords' dissatisfaction with Section 17 will be welcome news for Google, Yahoo, Facebook and eBay, all of which yesterday sent an open letter to Lord Mandelson urging him to remove it from the Bill.
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