The Home Secretary will announce this week that police must seek a warrant before carrying out electronic surveillance operations on homes. In emergencies, they will be able to go ahead and then apply to a Home Office-appointed commissioner within 24 hours for consent.
Mr Howard's retreat follows a long-fought battle over the civil liberties implications of the Police Bill which led to two House of Lords defeats and a threatened rebellion by Conservative backbenchers. As MPs prepare to debate the beleaguered Bill next week, Mr Howard met potential rebels in an attempt to persuade them to accept his latest amendment.
The Bill has already been altered once in a vain attempt to avoid defeat by a hostile alliance of backbench peers and law lords. But Mr Howard's plan for police to tell commissioners of their activities as soon as possible was rejected, and now, amended so that they must seek prior permission, it will face a similar trial in the House of Commons on Wednesday.
Among those who have expressed concern about the measure is Norman Lamont, the former Chancellor. Last night, Mr Lamont described the proposals in the Bill as "somewhat alarming" but added that he had not spoken to Mr Howard about them.
Ministers are also believed to have had representations from the two main opposition parties about the future of the Bill after each inflicted its own defeat on it in the Lords.
Mr Howard's revisions will please Labour, which was forced to retreat from its initial support for the measures in the face of an outcry from its own supporters, including civil liberties campaigners. However, it will not satisfy the Liberal Democrats and will only partially calm protests from civil liberties campaigners.
Last night Mr Lamont said: "I was concerned, but that doesn't mean my concern could not be met. I think some of the powers in the Bill are somewhat alarming."
Other Conservative MPs were more outspoken in their criticisms. Richard Shepherd, the member for Aldridge-Brownhills, said the measures would mean a loss of liberty.
"People in Australia, New Zealand and the US would not allow anyone to go into their home without a warrant. Why have we dropped from that standard?" he asked.
The Liberal Democrats, who had argued that circuit judges rather than commissioners should give consent for surveil- lance operations, said they would vote against the revised Bill next week.
Alan Beith, the party's home affairs spokesman, said: "We have been expecting a cosy carve-up between the Home Secretary and his ally, Mr Straw. The impression Mr Howard has given is that he is not looking for a broad consensus."
Mr Beith said the change was inadequate because it would allow judges appointed as commissioners by the Home Secretary both to issue warrants and to adjudicate on whether they had been issued correctly.
The director of the civil rights group Liberty, John Wadham, said: "The heart of our problem with the Police Bill has been the absence of prior consent by an independent authority. This agreement appears to deal with that, but there are many other issues which are of concern."