Peers have rejected to vote through the Government's Brexit Bill in the first major setback for the legislation.

The House of Lords voted 358 to 256 against the EU (Notification Of Withdrawal) Bill that is required for Theresa May to trigger Article 50 and begin the exit process.

A majority of 102 members backed a Labour amendment to guarantee the rights of EU nationals who currently reside in the UK to remain after Brexit.

They successfully argued EU residents should be given protection ahead of the negotiations.

The bill was passed to the House of Lords last month, without amendments, after Labour leader Jeremy Corbyn ordered his party to back the Government.

Viscount Hailsham was the first Tory MP to break ranks and said he would back the amendment to protect the rights of EU citizens.

He told members: "I do ask your lordships to take the high moral ground and give reassurance to the millions who have made their home here in the expectation that they will continue to live and work here."

Lord Campbell said it would be "catastrophic" for the economy if EU citizens in the UK were to be told to leave.

He said: "The consequences for the economy and so many of the services in the United Kingdom, as result of those non-British EU nationals... being no longer available [to work in the UK] would be catastrophic.

"I would rather have that on the statute rather than depend on the decision of the Home Secretary, who in five years time may no longer be in office."