The British House of Lords has passed the bill granting full British citizenship to Overseas Territories citizens.

It now has to be debated and passed in the House of Commons before it becomes law. And while some members of the House of Lords are not convinced that the law offers anything substantial to Overseas Territories citizens, there were no objections when it passed its third reading on Tuesday last week.

Effectively, the House of Lords have decided that lingering differences will be left to the Lower House to sort out.

Once the bill is passed by the House of Commons all British Overseas Territories Citizens will be entitled to a British passport and full rights of work and abode in the United Kingdom and the European Union, based on an operative date to be determined by the UK Ministers.

But the benefits of citizenship would be only for those who take up residence in the United Kingdom. And it will be up to each individual whether they exercise their right to a British passport.

Member of the Opposition Conservative Party, Baroness Rawlings, told her colleagues that her party supported the bill's underlying principles.

"However, it has become more and more evident that during the passage of the Bill that it is based on - and I hate to use the word - 'spin'. By this I mean that the rhetoric surrounding the Bill promises great things, while in reality the legislation makes few significant changes," she said.

"Citizenship involves a complex system of rights and duties. The notion that this concerns only the individual is surely the origin of much of the confusion that has surrounded certain aspects of the Bill.

"The second problem that we have encountered is the definition of 'residence'," Baroness Rawlings said. "The noble Baroness, Lady Amos, has been careful to point out that many of the benefits and responsibilities associated with British citizenship will be applicable only to those British Overseas Territories Citizens who exercise their right to live and work in the United Kingdom.

"Am I correct in thinking that British citizenship is to be perceived as a right ? Duties and benefits come only with taking the decision to reside in the United Kingdom."

Saying those who choose to remain in the territory will be "largely unaffected" by the proposed law, she called for the Government to clarify procedure for people to claim the right of abode in the United Kingdom.

"If a British Overseas Territories citizen acquires a full British passport, am I correct in thinking that he or she is often then free to live and work in the United Kingdom without any further screening procedure on the part of the Home Office ?"

Baroness Rawlings also questioned the significance of Britain's educational opportunities when Overseas Territories citizens would still have to pay foreign student fees unless they take up residence in the United Kingdom.

"We are presented with that all-important distinction between British citizens from the overseas territories and British citizens resident in the United Kingdom. I hope that that distinction does not come to jeopardise the possible wealth of opportunity open to British Overseas Territories citizens," she said.

Former Bermuda Governor Lord Waddington, one of the bill's prime supporters in the Opposition ranks closed the motion by saying that the Bill will be "warmly welcomed" in the Overseas Territories.

"I do not agree with my noble friend when she says it will not have any effect on people who remain in their own territories," he said.

"It will have two important effects. First, I believe that it will reinforce their loyalty to Britain and, secondly, it will assure them of a warm welcome at our ports of entry. That is very important indeed."

The Bill does not address what would happen if a territory goes independent after its passage.