Plans to offer a 50% sentencing discount to prisoners who plead guilty have been abandoned by the coalition.
The proposals – a key part of justice secretary Kenneth Clarke's reforms to the criminal justice system – had been intended to relieve pressure on crowded prisons.
But prime minister David Cameron, speaking at a Downing Street press conference, said that ministers had concluded a 50% discount would "send the wrong message" to criminals.
He went on to say: "There will be no change to the current position on early guilty pleas for any category of case."
"I don't really accept the idea that this government isn't extremely strong, resolute and determined.
"But I think it's right when you're making policies and delivering changes, if you consult, the weak thing to do is just keep ploughing on and say I can't possibly change because I might have a difficult time in a press conference."
Despite the U-turn, Mr Cameron pledged his support for the justice secretary, describing him as a "very tough" secretary of state who is "making great steps forward".
The government published its sentencing and legal aid bill this afternoon, which includes plans to make prisoners work harder and release more defendants on bail.
Threatening someone with a knife will carry a mandatory six-month jail sentence. Squatting is to become a criminal offence. The number of convicted foreign nationals is to be cut drastically.
Indeterminate sentences are to be phased out in favour of more life sentences.
And, crucially, proposals to extend the 33% discount to 50%, which would have saved £130 million in prison places, will no longer feature.
"A week ago I had hoped judicial discretion would have solved the problem," Mr Clarke told MPs, "but it didn't".
Labour leader Ed Miliband said earlier: "The public were rightly appalled that the government was proposing that people who committed rape should see their sentences cut by 50% and be let out within as little as 15 months.
"Now the prime minister has to ask how did he get himself into the position of making a proposal which he hasn't thought through.
"It is yet another example of this government not being in touch with people and making proposals which they then have to abandon."
The U-turn is the first major victory for the right-wing of the Tory party over the Liberal Democrats, who had enthusiastically backed Mr Clarke's proposals.
The justice secretary insisted the government was not undergoing another policy reversal, emphasising the shift was a response to a recently concluded consultation.
"It's not another U-turn, it's a perfectly balanced package of radical reforms which is very necessary," he said earlier.