The government is to amend the Representation of the People Bill to prevent groups of travellers moving to areas where elections - particularly by-elections - are to be held and claiming a local connection in order to get the right to vote.
For the home office, Lord Bach revealed this during the Bill's continuing committee stage.
He was replying to Conservative frontbencher Lord Mackay of Ardbrecknish, who withdrew his amendment which sought to prevent an influx of voters affecting the outcome of an election.
'I have discussed the matter with electoral registration officers who believe that our concern is somewhat over-exaggerated. Nevertheless, it remains'.
Announcing that government amendments would be brought forward at report stage, Lord Bach said the fears outlined may be exaggerated. 'We do not feel that the homeless have either the means or the inclination to travel around the country trying to influence the results of by-elections'.
However, the government would address the real concerns expressed by the lords and by MPs.
Lord Mackay, who said Conservatives peers agreed that homeless people should be allowed to register to vote, argued that squatters should not be allowed to register because they had acquired their local address unlawfully.
Baroness Gould said many squatters had been on the register for years. In a recent case, it took Lambeth LBC and the high court many years to determine whether a person was legally at an address. Another complication was the courts had decided that a number of people squatting at Greenham Common were legally entitled to register at that squat.
The amendment was withdrawn after home office minister Lord Bassam - chairman of the Brighton and Hove Squatters Association in the 1970s - said it confused two important issues: the unlawful occupation of property, and the right to register and vote. The two issues should be kept separate.
'One would imagine that the government are about to introduce a law which gives squatters the right to vote. It is clear, and has been apparent for a long time, that squatters have always had the right to vote. This amendment seeks simply to take away that right', he said.
Lord Bassam said there was a danger of being led into an oppressive situation, with police being sent round to addresses in the middle of the night to check whether someone was bona fide for electoral purposes. That seemed heavy-handed.
After discussions with the Association of Electoral administrators and SOLACE, the government is also to introduce amendments to allow clerical errors on the register to be corrected during an election period if the electoral registration officers is satisfied by the
claim or after a decision by the courts.