Decision will infuriate Tory rightwingers unhappy at what they believe is Strasbourg judges' interference in UK rights

Conservative hopes of pulling out of the European convention on human rights in response to its perceived interference in issues such as UK prisoners' votes have been dashed by Liberal Democrat objections.

Nick Clegg has won a battle to prevent the inclusion of total withdrawal from the convention in the terms of reference of an expected seven-strong commission of inquiry in UK human rights law.

The decision will infuriate Tory rightwingers angered at the way in which they believe the Strasbourg judges have interfered with UK rights. Some Tory backbenchers have argued that withdrawal is not as complex as some human rights lawyers claim.

The commission, due to be announced shortly, will discuss reform of the court's procedures, and the possibility of a British bill of rights acting as a supplement, but not as a replacement for the European convention. It would also look at a bill's relationship with the Human Rights Act that incorporates the European convention into British law.

It has also been agreed that the commission will also report to Kenneth Clarke, the justice secretary, and to Clegg, who is the man charged with responsibility for constitutional affairs.

The two men are probably the politicians in cabinet most sympathetic to the convention's aims, even if both are open to reform.

The decision effectively leaves prime minister David Cameron with the option of preparing his own party's proposals for the 2015 general election manifesto.

Clegg won his battle largely because the coalition agreement, negotiated in haste in the immediate aftermath of the general election, makes it clear that the coalition should not seek to withdraw from the convention. It states: "We will establish a commission to investigate the creation of a British Bill of Rights that incorporates and builds on all our obligations under the European convention on human rights, ensures that these rights continue to be enshrined in British law, and protects and extends British liberties."

The passage was negotiated between Cameron and Clegg right at the end of the coalition talks by the time Cameron was actually installed in Downing Street. This angered some Tories who feel the prime minister needlessly sold the pass on the issue when he was already in a strong negotiating position.

But a year ago Tory backbench distaste for the convention's interference had not reached its current intensity, largely due to the court's decisions to require Britain to give prisoners the vote, a decision that Cameron said made him feel sick.

Britain is appealing against the decision in the wake of the large Commons vote against the proposal. There are senior Liberal Democrat lawyers such as Lord Carlile who are critical of the delays in the court, and the quality of some of its judges.

Among those expected to sit on the committee are the Liberal Democrat Lord Lester, the Labour peer Baroness Kennedy and the eurosceptic barrister Martin Howe. Clarke has said he favours reform of the court, set up by the Council of Europe after the second world war. But there is disagreement on how easy it will be to negotiate its reforms.

Lord Woolf, Britain's most senior judge between 2000 and 2005 said: "We have got a stark option: either we accept the European convention, or we don't accept it and decide to leave the Council of Europe.

"It's very difficult to do what Mr Clarke indicated he would like to do when he's chairman of the relative body, because there are 47 signatories in Europe which are signatories to the European convention as well as ourselves".