The decision not to ban smacking is a "missed opportunity" to protect children from violence in the home, says England's children's commissioner.
The review found many parents opposed a total smacking ban
Sir Al Aynsley-Green said he was "deeply disappointed" by the government's decision.
Earlier children's minister Kevin Brennan said tighter laws introduced in England and Wales in 2004 were working.
He said a government review had shown that while many parents did not smack children, most did not support a ban.
Laws on smacking in England and Wales were tightened in 2004 to stop parents and carers who assaulted children using "reasonable punishment" as a defence.
Under the 2004 Children's Act, which came into force in January 2005 mild smacking is allowed but any punishment which causes visible bruising, grazes, scratches, minor swellings or cuts can result in action.
The government has been reviewing the law to see if it was working - some organisations have called for a ban on smacking altogether, including the children's charity the NSPCC. There is no outright ban in Scotland either.
Sir Al who, along with the children's commissioners for Northern Ireland, Scotland and Wales, has called for a complete ban on smacking, said, by not changing the law further, "we continue to send out confusing messages to parents about the acceptable use of violence across society".
He said children should have the same legal right to protection against "common assault" that adults do.
And he told the BBC: "Of course, in one sense it is a betrayal of what children are saying. If government are saying it really listens to what children are saying and acts in their best interests, I don't think it can actually claim to be doing that with this particular development."
Sir William Utting, for the Children Are Unbeatable Alliance, said ministers had "simply put off the inevitable again" and said they would step up pressure on the government to introduce a ban.
And Dame Mary Marsh, chief executive of the NSPCC, did not agree that the current law was working effectively and said there was "no place for the physical punishment of children".
Earlier in a statement to MPs Mr Brennan said the government's review had found that smacking was becoming less commonly used among parents.
He said police had discretion to deal with cases they considered appropriate, and the law had improved protection for children - although some people were not aware of the change.
"In response, the government will retain the law in its current form, in the absence of evidence it is not working satisfactorily."
Later he told BBC News 24 "about 70%" of parents did not want a ban on smacking and did not want a mild smack to result in a parent being criminalised.
"I think that is the common sense position and we've decided to keep that, and are happy that strikes the right balance," he said.
For the Conservatives, Tim Loughton said: "Clearly, if any adult is responsible for abuse and violence towards a child they need to face the full rigour of the law.
"But there is a world of difference between that and criminalising loving parents that use chastisement as they see fit in the interest of their child."
He added: "There was never any public appetite for re-opening this can of worms just three years after the issue was debated in Parliament."