Ministers have resisted a call in the Lords to remove Hamas from the list of terrorist organisations banned under UK law.

Home Office minister Baroness Williams of Trafford said the military wing of the Palestinian organisation was a proscribed organisation and it was not government policy to provide a “running commentary” on any such group.

Under the Terrorism Act 2000 the Home Secretary could consider removing a proscribed organisation only by written application, she told peers at question time.

Independent crossbencher Lord Hylton had asked the Government to consider dropping Hamas from the list of banned groups “in the light of its reconciliation agreement with Fatah”.

He acknowledged ministers were unlikely to say Yes immediately, but insisted the situation had “changed profoundly” since Hamas was first listed.

“Wouldn’t de-listing help all sides to be rather less intransigent than they have been up to now and build confidence among all Palestinians?” Lord Hylton said.

Lady Williams said it was a “challenging and complex” issue and the UK remained a strong supporter of promoting peace.

Tory Lord Kirkhope of Harrogate said the minimum required from Hamas and others was that they acknowledged the “basic right of the state of Israel to exist and to be fully part of the international community”.

Lady Williams said that was one of the expectations the UK had in its policy towards Hamas.

Another Conservative peer, Lord Polak, said it “beggars belief” to hear calls to remove Hamas from the list of proscribed organisations.

“They haven’t renounced terror,” he said. “They still call for the killing of Jews and the destruction of Israel.

Hamas should be disarmed because Israel could not be expected to negotiate with a “terror group that calls for its destruction”, he added.

Lady Williams told him: “Our policy on Hamas is very clear. They must renounce violence. They must recognise Israel and they must accept previously signed agreements.”