During last week's debate, several members of the House said charities should not have to pay the community infrastructure levy, a tax that would affect any charity given planning permission to develop land. It could cost the sector millions of pounds a year.
The Government put forward an amendment to the Planning Bill, which includes the new levy, to offer charities an exemption in "special circumstances" (23 October, page 11).
Lord Shutt of Greetland said that if the Government amendment were to be accepted "there would be more doubt. We want to get rid of doubt."
Lord Cameron of Dillington said the Government's decision would destroy charity projects, from village hall refurbishments to a new Cancer Research UK centre expected to cost £500m.
Nick Ivey, head of property at law firm Bates Wells & Braithwaite, who has campaigned for charities to receive an exemption, said many peers supported the cause and a number of charities had been in touch with him about it.
The bill will return to the Commons once the Lords have voted on the third reading.