An amendment to protect green spaces was made by Conservative peers and required local authorities to give "special regard to the desirability of preserving gardens, groups of gardens and urban green spaces". It included "pocket parks" and areas of open space benefiting wildlife and biodiversity.
Shadow communities and local government secretary Julia Goldsworthy said there was growing concern about planning rules leading to gardens being sold for new developments, adding: "Communities are rightly concerned that the character of their areas is being adversely and irreparably affected by developments in gardens and open spaces.
"It is a travesty that much-needed green space in urban areas is lumped into the category of brownfield land, and that the Government is insisting that there is not a problem," she added.
But the House of Commons rejected the garden protection proposals, stating that the "proposed statutory duty is unnecessary and inappropriate".
GreenSpace chief executive Paul Bramhill said he was disappointed with the lack of buy-in from the Government. "The implication is that we have a significant loss of gardens, leading to much more run-off from increased building and hard surfacing," he warned.
"This seems to be an unfortunate retrograde step and a wasted opportunity."
Open Spaces Society general secretary Kate Ashbrook agreed: "It is a great pity because (green places) should be protected and one can't assume they will be if it is not specified in the Planning Act."
The Government has now decided to carry out a review to see whether action is needed to tackle "garden grabbing".
During a debate on 24 November, local government minister John Healey said councils already had powers designed to protect residential back gardens.
He said: "The evidence suggests that most authorities are still not taking advantage of the scope of the powers that they have (to protect back gardens) under the guidance that we have already issued."
He added that a review would take place in the new year.
"There is, as yet, no systematic evidence that there is a problem in need of this solution," said Healey. "However, we have not closed our minds to the concerns that have been expressed. If there is a clear problem, we will act."
HTA director general David Gwyther said: "Garden grabbing continues to happen and it is clear that local planners aren't exercising proper control.
"Therefore, it is deeply disappointing that the Government rejected this amendment.
"You are either committed to real action to protect our urban environment or you are not - and it is clear this Government is not."