Thailand's government has withdrawn a draft law requiring many nightspots to shut at midnight - two hours earlier than the current late closing time.
Bangkok is famous for its night entertainment
Bowing to protests from the country's entertainment industry, the new regulation instead allows all such establishments to stay open until 1am.
"This measure can be considered a compromise," deputy Interior Minister Pracha Maleenond told reporters.
Mr Pracha said the new rules were expected to take effect on 1 April.
Until then all nightspots - including restaurants, bars and massage parlours outside specified entertainment zones - can continue to stay open until 2am.
The government backed away from its original plan at a meeting on Tuesday, after outraged nightlife entertainment operators warned it would threaten hundreds of thousands of jobs.
"This decision meets halfway between what is wanted by operators and law enforcers," Mr Pracha said.
The minister added that new entertainment venues would not be allowed to open outside designated zones and that there were no plans for more nightlife districts in addition to the three proposed in the capital, Bangkok.
The move was welcomed by the industry's operators, but some said that it still would have a strong negative impact on their businesses.
The nightlife crackdown began in 2001 and was led by Interior Minister Purachai Piemsombun, nicknamed the government's "Mr Clean".
It gradually ended the free-wheeling ways of Thailand's bars and clubs which used to shut only at dawn.
The government hopes the new rules will help curb growing juvenile crime, restore traditional values and change the country's well-entrenched image as a paradise for sex tourists.