Safety campaigners have attacked a move to two-yearly inspections, warning it would lead to "many more" deaths on the UK's roads.
Transport Secretary Justine Greening said she had decided to stick with the present system, which had been under threat in a review of red tape.
She set out a series of measures designed to improve the service offered by garages after official figures showed more than a quarter of tested cars had defects missed or wrongly assessed.
Among the suggestions are online review sites, expanding industry codes of practice to include MOTs, improving the information held on MOT certificates and sending in "mystery shoppers".
"Our garages are crucial to ensuring that Britain's roads continue to be among the safest in the world," Ms Greening said.
"Most are doing good work but the latest data shows that there is room for improvement.
"I want each motorist to be confident that a visit to the garage ends with their car repaired to a high standard by reputable mechanics rather than uncertainty about cost and the quality of service. Giving drivers the very best information about garage performance is absolutely key to achieving this goal.
"It means that responsible garages will be well placed to reap the commercial benefits of transparency. Garages where performance is not up to scratch will find themselves under pressure to do more for their customers."
A group campaigning against the change, including motoring organisations like the AA and RAC, garages and road safety campaigners, welcomed the decision.
Co-ordinator Bill Duffy, chief executive of Halford Autocentres, said: "Reducing the frequency of MOTs would have been dangerous, expensive and unwanted, and we welcome the Government's sensible decision today to drop the idea.
"We look forward to working with Government on how to make the MOT test better and to ensure consumers receive the best customer service."
The executive director of consumer group Which? said: "It's good news that the Government is scrapping plans to make MOTs every two years, as it would have certainly led to a reduction in the safety of UK cars.
"Which? believes that servicing cars less regularly could mean faults would go undetected for twice as long before being found.
"But our undercover investigations have revealed poor practice across the sector, even from garages that were members of a code of practice. So, beyond extending the codes, it's crucial that they are enforced and mystery shopping is ramped up to improve standards."
AA president Edmund King said: "The AA is delighted that the Transport Secretary has listened to the views of AA members who support the annual frequency of the MOT test.
"We also welcome the decision to include mileage information on MOT certificates, which will help people buying used cars understand their history.
"There are other ways the MOT can be improved and we will be polling our members to seek their views on making the test more relevant to today's motoring."
RAC motoring strategist Adrian Tink said: "It's a common-sense decision. We've seen no evidence to say that the current system is broken.
"MOT testing has made a substantial contribution to improved safety and reduction of casualties over many years.
"At a time when motorists are financially stretched, and many are understandably considering economising on vehicle maintenance, it is absolutely right to ensure most vehicles still have an annual safety check."
Shadow transport secretary Maria Eagle said: "The Government's decision to axe their reckless plan to cut MOTs is a victory for common sense.
"Ministers have again shown just how out of touch they are with motorists
in Britain who said loud and clear that they value the reassurance that
comes from knowing that cars on the road are subject to a regular MoT."
She added: "It was insulting to motorists
for ministers to have expected them to welcome a move that would have left 800,000 dodgy cars that are dangerous to drive on our roads.
"Unlike the Government, drivers were well aware that allowing those cars to continue on the road unchecked for an extra year would have made our roads less safe and increased insurance premiums for the responsible majority.
"It says so much about this Government's appalling attitude to road safety that they could ever have described MOTs
as 'unnecessary red tape'. They should now also think again about their
decision to abandon Labour's tough targets to reduce deaths and serious
injuries on our roads and restore the vital road safety grants that were playing such an important part in saving lives and meeting those targets."
Roger Maddison, national officer of the Unite trade union, said: "Yearly MOTs are a vital part of road safety, preventing wrecks on the road.
"There are thousands of people working in MOT
and repair centres. Thanks to this decision they will be able to continue this important service rather than having their jobs put at risk."
PA
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