Lord Irvine of Lairg was due to have published his proposals yesterday, but they were held back because they would have clashed with announcements on access to the countryside and lifelong learning.
It had been expected that Lord Irvine would propose the abolition of legal aid for all civil damage claims, effectively abolishing legal aid and replacing it with a "no-win, no-fee" system.
But Labour sources believe that controversial plan has been watered down, with no-win, no-fee restricted initially to personal injury claims - with a view to seeing how that worked.
That was being seen at Westminster as a device to shelve and quietly bury the more radical proposals initially favoured by the Lord Chancellor. "It means goodbye to all that," said one Labour source.
There will be no doubt in the mind of Lord Irvine's critics that his recent problems over his Whitehall "empire building"; his clashes with other departmental ministers, like Jack Straw, the Home Secretary; and the adverse publicity he has been getting over the redecoration of his official residence, have all weakened his bargaining hand over legal aid reform.
"Derry does not want a great fight on his hands at this time," said one friend last night.
"He does not want to be portrayed as the man who took legal aid away from poor people, spending it all on his wallpaper instead."
Lord Irvine's consultation paper will also include proposals to accelerate civil actions.