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The justice secretary has decided to axe plans to hold secret inquests without juries.
Jack Straw, in a written statement, explained that the move had not gained necessary levels of support in the House.
The attempted move to hold non-jury inquests for sensitive cases had been included as part of the Coroners and Justice Bill.
But on Friday he announced that the provisions did not "command the necessary cross-party support.
"The government felt these changes struck a fair and proportionate balance between the interests of bereaved families, the need to protect sensitive material and judicial oversight of the whole process," he said.
"However, following further discussions in the House and with interested parties, it is clear the provisions still do not command the necessary cross-party support and in the circumstances the government will table amendments to remove Clauses 11 and 12 from the Bill."
Straw continued: "Where it is not possible to proceed with an inquest under the current arrangements, the government will consider establishing an inquiry under the Inquiries Act 2005 to ascertain the circumstances the deceased came by his or her death.
"Each case will be looked at on its own individual merits. As with the provision in respect of certification of coroners' investigations, we would expect to resort to such a procedure only in very exceptional and rare circumstances."
The move was welcomed by the Conservatives and Liberal Democrats, which criticised the original proposals as a "waste of parliamentary time".
Former shadow home secretary David Davis stated: "At long last the government has seen sense and stopped this attempt to cover up an important part of the judicial process.
"Bereaved families need to know what happened to their loved ones as a matter of natural justice and as a closure to the grieving process."
And Liberal Democrat justice spokesman David Howarth said: "These proposals should never have been brought forward in the first place and wasted a lot of parliamentary time.
"The proposal to use inquiries instead is itself unsatisfactory because presumably these inquires will be held by judges without juries. Jack Straw must not sideline juries.
"Public confidence in investigating deaths at the hands of the state will not be maintained without the degree of public participation in the process that a jury brings."
Dods Parliamentary Communications Ltd