A source at the Department for Children, Schools and Families said the original plans had had "unintended consequences" and the changes would protect children without being too burdensome or bureaucratic.
The changes were welcomed by the Scout Association, teachers' union NASUWT and author Philip Pullman.
The general secretary of the Association of School and College Leaders, Dr John Dunford, said the decision to water down the plans was a "victory for common sense".
The previous rules would have had "unintended consequences for schools and parents and have set out a system that is much more proportionate to risk", Dr Dunford added.
Although supportive of the scheme, children's charity Barnardo's said it welcomed the "pragmatism" behind the changes.
Chief executive Martin Narey said: "As a result of this scheme, parents can have far greater assurance and trust in those who have access to their children."
Children's Secretary Ed Balls denied making a U-turn on the proposals, saying there had been a "ludicrous over-reaction" to the proposals from some schools and organisations.
People who have regular, frequent or intensive access to children have to register with the ISA
It costs £64 to register, but volunteers have their fees waived
The ISA is being phased in across England, Wales and Northern Ireland.
Individuals will be able to apply to register from July 2010. It will be mandatory from Novemeber 2010
The scheme covers England, Wales and Northern Ireland
A separate but aligned scheme is to be introduced in Scotland
He told BBC One's Andrew Marr Show that he wanted a "common sense" way of making sure children were safe from people "who do terrible things".
He said: "There are lots of myths here.
"A head teacher who is saying you should not come into school without a check, you shouldn't help with the school play - that is a ludicrous over-reaction.
"It is not an over-reaction to say that we should make our children safe, what we shouldn't do is do that in a way that is unnecessarily burdensome or doesn't quite get to the point.
"I will do this in a common-sense, proper, practical way, but let's not deny the reality, there are people who do some terrible things to children and it is our responsibility to make sure that kids are safe."
The minimum age of registration is being changed so that it does not include 16 to 18 year olds in education who help out with school activities.
And parents who host children on exchange visits of less than 28 days will no longer need to register.
The changes also mean it will not now apply to authors who visit different schools unless their contact with groups of children is frequent.
A number of leading writers, including Philip Pullman and Anthony Horowitz, had criticised the system.
Mr Pullman told the BBC the original plans had been "absurd" and he welcomed the changes.
However, he said such regulation remained "fundamentally unhealthy".
Shadow children's secretary Michael Gove welcomed the move but said there were still "fundamental problems" that should be addressed to achieve "proper focus on keeping children safe" and a society in which "volunteers are instinctively respected".
Lib Dem spokesman David Laws said the U-turn was long overdue but raised concerns that it would not go far enough.
"The existing daft regulations on child protection require even police officers to go through an expensive and bureaucratic registration system," he said.
"It's not yet clear whether rules of this type are going to be swept away."
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.