The era of so-called "Tesco Law" took a step closer to becoming a reality today with the publication of the draft Legal Services Bill.

The Bill, to be debated in the House of Commons, proposes allowing general businesses such as supermarkets or insurers to provide legal services and own law firms for the first time.

Its author, Lord Falconer of Thoroton, the Lord Chancellor, said: "The Bill sets out arrangements to facilitate alternative business structures, which would enable different kinds of lawyers, and lawyers and non-lawyers, to work together on an equal footing.

"These structures will allow legal services to be delivered in new ways, promoting greater competition and innovation and enabling providers to better respond to the demands of consumers."

The Bill is expected to pass into law and non-legal businesses are already moving to take advantage of the reforms. The AA, the insurance and breakdown service, already offers legal services relating to personal injury and inheritance issues but at present outsources the business to a range of law firms.

A spokesman for the AA said: "We see providing legal advice as a natural and logical fit with our existing business areas and will be expanding our legal offering in due course. Although we do not employ lawyers or own a law firm at present, this is something we will look at very closely in the future."

The Co-op, a British supermarket and financial services group, has also said it plans to offer legal services once the reforms are passed into law. Ironically Tesco, the supermarket giant whose name has become synonemous with the reforms, has yet to commit to offering legal services.

Lord Falconer said the philosophy behind the changes is to simplify the way consumers access legal services therefore taking some of the "heartache" out of buying a house or dealing with the death of a relative caused by the myriad of different services needed.

The proposals will allow an estate agent, for instance, to provide conveyancing services to a home buyer who would not then need to instruct a separate solicitor. Similarly a funeral director will be able to offer advice on the execution of a will.

It includes strict tests to ensure that only appropriate people are allowed to offer legal services.

Kevin Martin, the president of the Law Society, told BBC Radio 4's Today programme that provisions to open up the legal market to non-law busineses were welcome as long as the new entrants were required to comply to the same consumer protection standards as law firms.

"It should improve consumer choice, but we are very concerned that the regulation of these entitites is proportionate and that there is a level playing field," he said.

The draft Bill will be scrutinised by a specially established House of Commons committee that is due to report its findings by July.

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