The Social Enterprise Coalition has said a law requiring all public sector contracts to carry a social clause has become a "very real possibility" after MPs backed the bill in Parliament.
The Public Services (Social Enterprise And Social Value) Bill, which had its second reading on Friday, would require bidders for public sector contracts to say what positive social outcomes they would create and would make it easier for charities and social enterprises to win public sector contracts.
It would also require central and local government to have a central strategy for relating to social enterprise.
The private member's bill from Chris White, the Conservative MP for Warwick & Leamington was drafted with the help of the Social Enterprise Coalition. It will now progress to committee stage.
It has received the backing of MPs from all parties, including Nick Hurd, the Minister for Civil Society, who pledged support from the government for the bill.
"We cannot be anything other than delighted with today's result," said Peter Holbrook, chief executive of the coalition. "It was a major hurdle to overcome.
"If the bill proceeds, it could become one of the most important pieces of legislation for our sector in a generation. The fact that it has support from the three main parties makes the turning of this bill into law next year a very real possibility."
The bill will next go the Public Bill Committee in early 2011, where it will be debated further.