First Minister Rhodri Morgan has said he intends to call a temporary halt to changes to Welsh hospital services.
It follows objections to Labour's proposals for health "reconfiguration," a big issue in the assembly election.
But campaigners at Llandudno Hospital, which would be affected, said it was only a "delay in the downgrading".
The news came as Mr Morgan unveiled plans for the first Welsh laws in centuries at the assembly's first full business session since the election.
Mr Morgan wrote to Liberal Democrat leader Mike German revealing Labour's intentions to review its hospital plans, which had involved moving certain services.
In the assembly chamber, Mr Morgan said changes still needed to be made but admitted that Labour had "failed to take the public with us" during the process.
He also challenged the other parties to come up with new solutions rather than saying "I told you so".
In the letter, Mr Morgan also said that his government would undertake that already agreed changes in district general hospitals would not be implemented until associated community services were in place.
Nick Bourne, leader of the assembly Conservatives, welcomed the move but questioned whether Labour was prepared to listen to local people before making changes to local NHS services.
Earlier, some opposition AMs complained that they had not been properly consulted about the proposals.
The announcement comes a day after the Queen performed the official opening of the assembly's third term in a ceremony also attended by the Duke of Edinburgh, Prince Charles and the Duchess of Cornwall.
Now the assembly is getting down to business, with Labour running a minority government, which means its policies will need support from other parties.
The programme includes measures to give NHS patients more rights and to improve environmental protection and waste management.
Other measures could divide the opposition parties, with possible moves to restrict the sale of council houses likely to alienate the Conservatives, while attracting support from Plaid Cymru and the Liberal Democrats.
Mr Morgan said he hoped it would be possible to build a progressive consensus in the assembly to provide the policies that Wales require.
"It's no accident that the proposals focus on the bread-and-butter issues," said Mr Morgan.
"Our object must surely be not to create more law, but better law for Wales, and to apply our energies to bring about improvement in those aspects of daily life which directly impact on the daily lives of our fellow citizens."
Speaking earlier, Liberal Democrat AM Peter Black said although Labour had been talking about consensus, he was disappointed he did not know what was going to be in Wednesday's announcement beforehand.
Mr Bourne said Conservatives should have been consulted before the programme was put forward and that Labour needed to change its approach if it was to survive.
However, Plaid Cymru leader Ieuan Wyn Jones said Labour should be given a chance and it was not sensible to "turf governments out willy-nilly".
Responding to the criticism, Budget and Business Minister Jane Hutt Labour had carried out several discussions with the Lib Dems and Plaid since the election.
"We will demonstrate that a minority government is a listening government," she said.
"We are not lecturing, we are reaching out, we are working together."