The lower house of parliament voted by 127 to 47 against the motion proposed by Lorenzo Quadri of Ticino's Lega party during the furore over the election of Ignazio Cassis to the Federal Council.
Cassis, who had dual Swiss-Italian nationality, gave up his Italian citizenship before the election in order to confirm his loyalty to Switzerland, according to news agency ATS.
At the time some condemned the move, saying it signalled that dual nationals were considered second class citizens. But others agreed with his decision.
For Quadri, who proposed the idea of banning dual nationals from government office, possessing a foreign passport is “incompatible” with the role of federal councillor or MP.
He wants to follow the lead of Australia, where it is forbidden to have dual nationality and be a member of parliament. That 116-year-old rule had serious ramifications for the Australian government over the summer when several senators, unaware they had automatic citizenship of another country, were forced to step down.
The proposal in Switzerland would also have banned those working in the diplomatic corps from having a citizenship other than Swiss, as well as secretaries, government assistants and anyone else with access to confidential information.
But such a move would have been a violation of the constitution, argued Swiss chancellor Walter Thurnheer.
Currently, anyone in Switzerland who has the right to vote, including dual nationals, also has the right to stand for parliament. To prevent dual nationals from standing for office could violate their rights, said Thurnheer.
According to the Swiss statistics office there are nearly 900,000 adult (aged 15 and over) Swiss citizens with a second nationality.
Citizens of other countries do not have to renounce their passport of origin when they become Swiss, though that is sometimes required by their home country, for example Austria and Norway do not allow dual nationality, though that may be changing in the latter.