Disclosure of the decision has led to accusations that ministers are going back on promises to give the House of Commons a free vote on the issue. Opponents of Sunday trading say they might now vote against any proposed reforms, threatening to prolong the legal and political confusion.
At present, shopworkers cannot - in theory - be compelled to work on Sundays. That principle will be tested by Ruth Taylor, 50, at an industrial tribunal in Scarborough on Wednesday. Mrs Taylor will claim that she was unfairly dismissed by Franlow Ltd, a clothing shop, because she refused to work on a Sunday, in line with her Christian beliefs.
Paul Diamond QC will argue that any contract of employment requiring Sunday working is contrary to trading law and therefore unenforceable. The Keep Sunday Special campaign is paying Mrs Taylor's legal costs.
The campaign had wanted MPs to strengthen this protection and extend it to new employees when the Commons votes on the issue later this year. But in a letter to Monty Moss, chairman of clothing firm Moss Bros, Gillian Shephard, Secretary of State for Employment, rules out legislation to prevent shops from forcing new employees to work on Sundays.
'The Government's view is that working days and times should in general be . . . a matter for agreement between employers and employees according to their own priorities,' she wrote.
Last November, Kenneth Clarke, the Home Secretary, said MPs would be given the chance to vote on three options over Sunday trading: the Government's proposal to end all restrictions; the Shopping Hours Reform Council's proposal to allow all shops to open for six hours; and the proposal put forward by Keep Sunday Special, which wants only small shops to open and includes a clause enabling all shopworkers to refuse to work on Sundays if they wish and to earn double time if they do work.
Now the Government is saying that only existing workers will be afforded protection. This could prompt opponents of Sunday trading to join Labour MPs in voting against the entire Bill, destroying attempts to resolve what has become an embarrassing muddle for ministers.