After a parliamentary debate today, members in the Lords voted by a majority of 268 against powers in the bill. Peers from all parties expressed concerns about the contents of the proposed legislation.
"The government should see sense, accept the removal of these offending clauses, and start to rebuild our worldwide reputation", said Angela Smith, the opposition Labour Party's leader in the Lords.
"The government should see sense, accept the removal of these offending clauses, and start to rebuild our global reputation".
"The UK Internal Market Bill is not about undermining the Belfast Agreement, it's about standing behind it and making sure it works and looking after the interests of Northern Ireland - making sure the peace that has been hard-won there can carry on", UK environment secretary George Eustice insisted.
The UK government announced the launch of its new look, post-Brexit Tier 2 visa program on 1 December.
Biden, who was declared victor of the USA presidential election on Saturday, has warned that Northern Ireland's Good Friday peace agreement can't "become a casualty of Brexit".
An open border was a keystone of the US-brokered 1998 Good Friday Agreement that largely ended more than 30 years of violence over British rule in Northern Ireland.
"Companies and institutions like customs offices around the European Union need to have clarity about what tariffs to impose and other measures if there is no deal, and by the middle of the week we will have finally reached that point when such measures have to be spelled out", the diplomat said.
On Monday night, peers voted by a margin of 433 to 165 to strip sections of the Internal Market Bill, that would have given the British government the power to remove sections of the initial Withdrawal Agreement, which the government claims would create artificial trade barriers between Northern Ireland and the rest of the United Kingdom. "We are still very far from an agreement", he said.
France's European affairs minister, Clément Beaune, said Downing Street was misguided if it believed that running down the clock would work to their advantage, citing the experience of the last four years of Brexit talks.
"I personally have been quite anxious about this, in the sense that I see the US-UK partnership as one that has been extremely important over the last hundred years and I just don't know that it's going to be as effective and as consequential as it has been moving forward".
Senior figures in Biden's Democratic party have also warned that the bill could also jeopardise the prospects of a UK-US free trade pact.
The controversial internal market bill passed its third reading in the Commons with a majority of 84 in September, with MPs having voted 340 to 256 in favour of allowing government ministers to break worldwide law.
Michael Howard, a former Conservative Party leader who now sits in the Lords, said he was "dismayed" by the government's behavior.
The Prime Minister's spokesperson added to journalists in a briefing: "MPs backed the internal market bill by 340 votes to 263 in September, and our position remains that the clauses are a vital safety net".
Major's grim predictions for the future of Britain came after Lord Falconer, Labour's shadow attorney general, asserted in an interview with Sky News late last week that the government is "in a big hole" over the Internal Market Bill, and that the UK's global clout may be affected by the possible U.S. presidency of Joe Biden.