The government has proposed almost halving the number of people in the House of Lords
Liberal Democrat leader Nick Clegg is set to announce that plans for reform of the House of Lords are to be abandoned, the BBC understands.
The proposals faced opposition from many Tory MPs and speculation has been mounting that the plans would be axed.
Lords reform has been a key goal for the Lib Dems, and its failure is likely to raise coalition tensions.
There has been speculation that the Lib Dems might drop support for boundary changes in response.
Last week, Lib Dem sources told the BBC the reforms were a "red line", adding "there will be consequences" if they are shelved.
Liberal Democrats within the coalition government had pushed for reforms which would have seen 80% of peers elected and the total number of members halved to 450.
But 91 Conservative MPs rebelled against the government in a vote in July - the largest such act of defiance since the coalition was formed in 2010.
The prime minister told Tory MPs last month he would make "one more try" to push Lords reform through in September when the Commons returned from its summer recess.
A report in the Daily Telegraph last week said attempts by Mr Cameron to win round rebels in his own party had failed and the reforms would now be scrapped.
Labour said the Conservatives were "tooth and nail opposed to reforming and modernising the second chamber".
