Prisoners serving short sentences or approaching the end of their time behind bars should be given the vote, a cross-party parliamentary committee has recommended.
The committee said it would be "wholly disproportionate" for the UK to defy a ruling by the European Court of Human Rights and said the Government had failed to set out a "plausible" case for maintaining the existing blanket ban. It called on the Government to table a Bill granting the vote in local, general and European elections to those serving less than 12 months or within six months of release, with exceptions for those convicted of particularly serious crimes.
But the panel of MPs and peers was split over the issue, with chairman Nick Gibb and two other MPs arguing that the Government should give Parliament the choice between offering prisoners this restricted franchise or keeping the ban.
The majority recommendation flies in the face of a House of Commons vote in 2011, when MPs voted by an overwhelming 234 to 22 to preserve the ban, in spite of the ECHR ruling that it breaches the European Convention on Human Rights.
Justice Secretary Chris Grayling last year published a draft bill offering MPs three options - giving the vote to prisoners serving less than four years or less than six months or keeping the ban. But Prime Minister David Cameron has made clear he does not want to extend votes to prisoners, telling the Commons it would make him "physically ill".
In its report, the joint committee of both Houses set up to consider the Draft Voting Eligibility (Prisoners) Bill found that Britain was under a "binding international law obligation" to comply with the ECHR ruling and defiance would be "completely unprecedented" and have "grave implications".
"A refusal to implement the Court's judgment, which is binding under international law, would not only undermine the standing of the UK, it would also give succour to those states in the Council of Europe who have a poor record of protecting human rights and who could regard the UK's action as setting a precedent for them to follow," said the committee.
"The rule of law has been and should remain a fundamental tenet of UK policy. It is not possible to reconcile the principle of the rule of law with remaining within the Convention while declining to implement the judgment of the Court."
The committee said it would be wrong for Mr Grayling to put the draft Bill to a vote, because "we do not believe that the Government itself should be proposing to Parliament an option that it knows to be unlawful".
It accepted that amendments were highly likely to be tabled to retain the blanket ban, and said it would be a matter for MPs' and peers' consciences whether they supported them.
But it added: "This committee considers it would be wholly disproportionate for Parliament to take the grave step of undermining the international rule of law, which the United Kingdom has worked for so many decades to defend and promote, for the sake of a small modification of domestic law."
The UK is one of only five of the 47 Council of Europe members to ban all convicted prisoners from voting, alongside Armenia, Bulgaria, Estonia and Russia. Granting the vote to those serving less than 12 months was unlikely to affect more than around 7,000 people in any election, said the committee.
It recommended giving inmates postal votes for their home constituencies, and predicted that prisoners' votes were "unlikely to have a bearing on the outcome of elections".
"We understand the symbolic force of the current prohibition on convicted prisoners voting, but the arguments for relaxing this prohibition are, on any rational assessment, persuasive," said the report.
"The Government has failed to advance a plausible case for the prohibition in terms of penal policy - disenfranchisement linked to detention is an ineffective and arbitrary punishment, particularly for the tens of thousands of prisoners serving short sentences who pass through the prison system each year.
"There is no evidence that disenfranchisement plays any part in deterring crime. Insofar as penal policy has a bearing on prisoner voting, the strongest argument we have heard is that there could be potentially a mild rehabilitative effect if some prisoners were to be enfranchised."
The committee dismissed suggestions that the ECHR was interfering in the UK's national sovereignty: "Parliament remains sovereign, but that sovereignty resides in Parliament's power to withdraw from the Convention system; while we are part of that system we incur obligations that cannot be the subject of cherry picking."
The report's key recommendation was approved by MPs Crispin Blunt (C) and Sir Alan Meale (Lab) and peers Lord Dholakia (Lib Dem), Baroness Gibson of Market Rasen (Lab), Lord Norton of Louth (C) and Lord Peston (Lab). Alongside Conservative former minister Mr Gibb, Tory MP Steve Brine and Labour's Derek Twigg dissented.
Mr Gibb said: : " Whether Parliament accepts the majority or minority recommendations of this Committee, it will need to consider whether it is right to extend the franchise to those denied their liberty and the right to engage in society as a result of serving a custodial sentence. Parliament will also need to consider the extent to which it is content to permit the European Court of Human Rights to encroach into domestic policy areas that appear far removed from the original intentions of the drafters of the European Convention on Human Rights."
A Ministry of Justice spokesman said: "We have always been clear that prisoner voting is an issue on which Parliament should decide, and the report of the Joint Committee is an important contribution to this process and will help inform Parliament's decisions.
"This is an issue on which Parliament has expressed strong views.The Government will consider the report carefully and will respond early next year, setting out how Parliament will be given its say."