One of the most controversial Bills in the parliamentary timetable has been dropped in a spectacular U-turn by ministers.

Plans for reform of the Mental Health Act were abandoned yesterday as ministers bowed to criticism that they were authoritarian and unethical and would increase stigma.

Ministers conceded defeat after an eight-year campaign against the proposals that united the mental health establishment.

An alliance of 77 mental health organisations joined forces to fight the Bill. In place of a new Act, ministers announced they would amend the existing 1983 law with a shorter, simpler Bill.

But campaigners warned that the most controversial elements of the abandoned Bill were being retained. A new power to compel detained patients to continue with their treatment after they have been discharged will be introduced and the existing restriction on detaining patients with a personality disorder who have been regarded as untreatable will be swept away.

Rosie Winterton, a Health minister, said: "Introducing supervised community treatment is a vital part of getting help to people who need it, supporting carers and protecting the wider public."