Ministers were forced to change the Bill after pressure from the House of Lords and voluntary organisations including the Fostering Network and the National Children's Bureau.

Junior schools minister Lord Andrew Adonis has now written to peers saying the new amendment puts a general duty on councils to provide sufficiently diverse accommodation for young people within their local area.

The Bill already contains measures to reduce out-of-area placements and Adam Hug, policy and campaigns manager at the Fostering Network, said the new duty would strengthen this work. "This will give a clear message to those commissioning placements that they need to make sure they're meeting the needs of children and they need to make sure they have a range of accommodation in place in their area," he said. "There now needs to be work within the Care Matters implementation plan to flesh out how this responsibility is going to be monitored."

But the duty could have big implications for local authorities. A Local Government Association spokesman said: "The introduction of the amendment to secure sufficient placements will require detailed discussions with the councils about timing and enforcement. There will also be matters of resource to discuss so councils can follow this duty through to delivery. It is vital this new amendment is not enforced at the expense of ongoing initiatives to improve local authority commissioning of placements."

While the Children's Services Development Group welcomed the change, it raised concerns about how it will be put into action. A spokesman for the group said: "Appropriate provision must be developed to meet the needs of all children, regardless of where they live."

Meanwhile, The Adolescent and Children's Trust (TACT) last week wrote to MPs to seek reassurance on schools admissions for children in care as pupils across the country found out which secondary school they would be going to.

The white paper Care Matters: Time for Change says children in care should get the highest priority for school placements.