In an interview with the Financial Times, Lord Puttnam said that up to 60 Labour peers could rebel against the proposals for Five "unless the government finds a way through this tangle".
He has warned the government that unless it makes some compromises on the communications bill, which would allow media moguls such as Rupert Murdoch to take over Five, it could face defeat.
Liberal Democrats are already opposed to the rule, while the Tories are in favour of liberalisation of the current clause. However, Lord Puttnam says that the government can only rely on 30% of their own vote, as peers worry that Murdoch would have unchecked power if he took ownership of Five and that there needs to be some concessions in place
In the interview, he said: "My preference is for a compromise based on the notion of what I call the ratchet: a situation whereby Five, once it reaches, say, 10% of the analogue audience share commits to a number of serious public service obligations."
Lord Puttnam chaired the scrutiny committee into the government's communications bill, and recommended that plans to relax the ban on newspaper proprietors owning terrestrial television stations be dropped. He has since criticised the government on several occasions for ignoring his recommendation, saying that the government has not given reasons for rejecting it.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .