Home Secretary Theresa May appears to have scored a victory by leading a cabinet revolt against minimum alcohol prices.
The government has been consulting on a price of 45p per unit, and the proposal appeared to have the support of David Cameron.
The government has argued that introducing a minimum unit price would help reduce the levels of ill-health and crime related to alcohol and prevent practices such as "pre-loading", where people binge-drink before going out.
May, the former health secretary Andrew Lansley, and the education secretary, Michael Gove, have all opposed the proposals on grounds that the impact on living standards would be unacceptable.
The proposals have also been rejected by the Mayor of London, Boris Johnson, as regressive.
The news of a likely retreat sparked anger among some Tory MPs such as Tracey Crouch and Dr Sarah Wollaston.
The consultation has been led by the Home Office, although the Department of Health was closely involved.
Research has suggested a 45p minimum price could reduce drinking by 4.3%, potentially saving 2,000 lives within a decade. This was why the idea had such strong backing from the medical profession.
If a 45p unit price were to be introduced a can of strong lager could not be sold for less than £1.56 or a bottle of wine for less than £4.22.
The Home Office said it was considering all representations to its consultation, which closed on 6 February, and will report back in due course.
Labour's shadow home office minister, Diana Johnson, has kept her options open in recent weeks, saying: "We support a minimum unit price where it prevents too low supermarket prices whilst protecting responsible pubs. The debate about levels needs to be based on evidence of what will work, yet the Home Office's consultation has only considered one potential price level of 45p.
"The government needs to make sure it does not just create a cash windfall for the supermarkets, instead of lowering prices of other goods or supporting better prevention and treatment of alcohol abuse to cut crime further and save lives."
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