The Justice Secretary may amend new legislation that would allow Lords to resign their seats to stop ex-peers from becoming an MP for up to five years.

There has been speculation that Lord Mandelson, the First Secretary of State and Business Secretary, could stand down from the Lords to take a seat in the Commons and bid for the Labour party leadership.

The Financial Times reports that Jack Straw “wants a quarantine period – probably five years – between a peer’s resignation and any attempt to win a seat as an MP in the Commons.”

Justice Secretary Straw, who is also Lord Chancellor, presented the Constitutional Reform and Governance Bill to the Commons just before the recess.

It contains proposals for reform of the Lords, judicial appointments, treaties and the civil service and will be debated by MPs when Parliament returns from the summer holiday in October.

It removes the hereditary principle from the House of Lords and allow for the disqualification of peers found guilty of serious criminal offences.

It also contains proposals to allow peers to resign from the Lords, something it is not possible to do at present.

The Lords provisions contained in the Bill build on the House of Lords Act 1999 to end the system of by-elections which allowed for 90 hereditary peers to continue to sit in the House of Lords.

They are currently replaced by a poll of hereditary peers from outside the House when a vacancy is created by the death of a hereditary peer.

Ending the by-elections will eradicate the hereditary principle from the second chamber.

There are approximately 750 members of the House of Lords, including 26 bishops and archbishops of the Church of England.

A Ministry of Justice spokesman said the proposal to restrict former members of the upper chamber standing as MPs immediately upon ending their membership of the House of Lords had not been finalised.

“This is absolutely nothing to do with Peter Mandelson,” he told the Financial Times.

“The idea of a cooling-off period is an idea which we mentioned in a white paper last year.

“It is something of an omission that it is not in the current bill.”

Peter Mandelson’s return to British politics in October 2008 after more than seven years of out of the Cabinet shocked Westminster.

He and the Prime Minister were regarded as sworn enemies since Mr Mandelson chose to back Tony Blair over Mr Brown for leader of the Labour party in 1994.

Gordon Brown promoted him and gave him the title First Secretary of State and and expanded department in the June reshuffle.

Lord Mandelson has dismissed suggestions that he harbours ambitions to become Prime Minister, which would realistically require him to return to the Commons.

Earlier this year he was named as the most influential gay person in Britain by PinkNews.co.uk.