A controversial £8m plan to turn Reading's ring road into a giant one-way system has been dropped.
A radical makeover was part of the plan for Reading's town centre
Reading Borough Council said an independent commission will look into the traffic problems and make recommendations by mid-2008.
The neighbouring Wokingham council, which opposed the plan, "warmly welcomed" the news.
However it warned that if Reading moves to reinstate the development in 2008 it will press for a formal public inquiry.
"We are looking for the independent public commission to be truly independent," said Frank Browne, the leader of Wokingham Borough Council which has withdrawn a legal challenge against the plan.
Leader of Reading Borough Council, David Sutton, said that based on objections they decided in June to set up the independent commission.
However by the time the commission reports the traffic regulation order (TRO) would have expired so they decided to quash it.
"The making of any new order will depend on the findings of the commission whether or not to proceed with any scheme.
"We are pleased that Wokingham has withdrawn its legal action and anticipate that there will be plenty of scope for opinions, including those of Wokingham Borough Council, to be heard by the independent commission."