In particular, MPs voted 324 votes to 298 to reject a Lords amendment which would have strengthened parliament's statutory "meaningful vote" on the final deal between the United Kingdom and the EU.
Parliament is finalising laws that will formally end Britain's membership of the European Union, a process which has forced the government to make some important concessions that will change the dynamic of Brexit negotiations.
But Brexit campaigners feared it could weaken Britain's negotiating stance in talks to leave the European Union and the Brexit ministry was quick to put out a statement saying: "We have not, and will not, agree to the House of Commons binding the government's hands in the negotiation". But a government official said they had just agreed to open talks on the basis of the rebel amendment.
"We will use parliamentary devices to hold this government to account".
May says the changes would weaken the government's negotiating position, and the government will try to alter or reverse them in the House of Commons on Tuesday and Wednesday.
The government was braced for a tight battle after junior justice minister Phillip Lee, a personal friend of May's, resigned on Tuesday morning in order to back the veto amendment.
The "meaningful vote" will be the first major test after the House of Lords introduced changes to the bill, trying to reshape the government's approach to Brexit by encouraging lawmakers to press for the closest possible ties.
On Wednesday, votes on whether to remain a member of the European Economic Area, which offers tariff-free access to the EU's single market in return for accepting free movement of people, goods, services and capital, may expose a split between pro-Brexit and pro-EU lawmakers in the opposition Labour Party.
Theresa May averts Brexit revolt but pro-EU rebels claim victory - Article
She has previously spoken of the threats she faced for challenging the government, and revealed that one colleague would not be voting as they wished this week for fear of reprisals.
After winning yesterday's ballot over changes to a future "meaningful vote" on a final agreement with Brussels in her European Union withdrawal bill, May's plans to end more than 40 years of membership in the bloc were still on track.
A dispute quickly arose about the third clause of Grieve's amendment, with Brexiters, including some ministers, quickly saying all that had been agreed was talks - and no government could agree to be "directed" by MPs.
Opening the debate, Brexit Secretary David Davis insisted the government would abide by three principles to defend the will of the British people. This means MPs and Lords could tell May to go back to negotiating table and get something better.
Speaking to City leaders, John McDonnell said: "We campaigned for Remain but many of our MPs, including myself, now represent seats which voted heavily Leave".
Also on Tuesday, the government successfully overturned an attempt to remove the date of Brexit from the face of the bill. But for now, the government seems to have prevented an embarrassing defeat, and the Tory rebels have avoided the unpleasantness of colluding in the defeat of their Prime Minister.
Lawmakers also rejected, much more narrowly, calls to keep the U.K.in a customs union with the EU.
He later tweeted to say that the government's concession on the "meaningful vote" had made his resignation worthwhile.