Home Secretary Jacqui Smith has told MPs that plans to extend terror detention to 42 days will be dropped from the Counter-Terrorism Bill.
It follows a heavy defeat for the government in the House of Lords, which threw out the plan by 309 votes to 118.
Ms Smith said instead the measure would be in a separate piece of legislation to be brought to Parliament if needed.
The Tories said she should just say she was abandoning 42 days. The Lib Dems said it was a "humiliating retreat".
The government's plan to extend the period for which police can hold terrorist suspects before charging them squeezed through the Commons in June by just nine votes.
On Monday, it was defeated by a majority of 191 votes in the Lords, described by the Conservative former shadow home secretary David Davis as "the biggest defeat in the Lords in living memory".
In a forceful statement to MPs less than two hours after the vote, Ms Smith said: "I deeply regret that some have been prepared to ignore the terrorist threat, for fear of taking a tough but necessary decision."
The decision to prepare emergency legislation instead is merely a fig leaf which does little to disguise their defeat
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