The Justice Secretary has announced that his proposal to contract out criminal legal-aid representation to the lowest bidders will be scrapped, reports the BBC.
The controversial proposals were due to form part of the latest batch of measures designed to reduce the UK's annual legal-aid budget.
The legal-aid system funds free legal advice and representation for those who cannot afford to pay for a lawyer.
However, the system was perceived to be bloated, and in the light of major cuts to all government spending the Justice Ministry set about plans to scale down the availability of legal aid.
The first tranche of cuts came into force in April this year, with legal aid being removed from almost all family law and divorce cases, personal injury claims, some employment law, immigration cases and some debt and housing issues.
The cuts were designed to trim £350m from the annual £2bn legal-aid budget.
Almost immediately after the changes came into effect, the Justice Secretary announced proposals to change the criminal legal-aid system, forcing solicitors to bid for allocations of work through price-competitive tendering, effectively awarding criminal legal-aid representation to the lowest bidder.
At present those accused of crimes are able to choose their lawyer.
However, in an interview with The Times newspaper published today, Grayling announced that the proposals will be scrapped.
Critics argued that the proposals would irrevocably damage the criminal justice system.
Labour MP Karl Turner warned the House of Commons that the proposals would spell the end for many small, expert solicitor practices.
"Price-Competitive Tendering will inevitably lead to the market being dominated by the big multinationals, the usual suspects - G4S, Serco, Capita," he said.
"Small businesses, the expert businesses who have established their practices over a number of years (would struggle) to exist," he added.
The Government is expected to press ahead with further cuts, announcing plans to remove legal aid for criminal cases in which defendants have an income of more than £37,500 per year. Proposals also include ending legal aid for the 11,000 cases brought by prisoners each year, and cutting the amount that legal aid will pay lawyers for their services.