Planned council housing rent increases averaging 6.2% in England have been halved, the government has announced.
Housing Minister Margaret Beckett said local authorities would receive funding to help them keep the average weekly rent rise at £2, instead of £4.
The new guideline rent increases, starting on 1 April, reflect the current lower rate of inflation.
Local councils hailed the move as a victory, after they lobbied the government to make the change.
"We have listened to what councils and their tenants have said to us about the planned rent increases, and we are determined to help tenants get a fair and affordable deal," Mrs Beckett said in a statement.
"We are facing challenging economic times and it is right that this government offers real help now to council tenants," she added.
The Department of Communities and Local Government set the original guideline figure back in September 2008, when inflation was higher after a summer of record high oil prices.
Westminster Councillor Phillipa Roe hailed the change a victory after a "vigorous campaign" by local councils.
"If the rent rise had gone ahead, it would have hit those on fixed incomes such as pensioners and those just above the benefits threshold particularly hard, just as Britain slides further into recession," she said.