The decision came amid concerns that an amendment could provide a 'get-out clause' for intelligence agencies regarding the proposed duty of candour.
The Prime Minister stated the government is taking time to “get the balance right” between accountability and national security interests.
Ministers are now consulting with campaigners and bereaved families to agree on how to proceed with the Public Office (Accountability) Bill.
Campaigners and Labour figures had criticised the amendment, arguing it risked undermining the law's spirit by creating an opt-out for security services.