The deputy prime minister has abandoned plans to allow parliament to approve major infrastructure projects, such as new motorways or airport runways.

In a statement to MPs, John Prescott said such a move would not be "the best way forward".

The change had originally been put forward by former local government secretary Stephen Byers, but opponents said the change would allow government whips to force through new developments against the wishes of local people.

Prescott said he agreed with the conclusions of the Commons transport, local government and the regions select committee, which has been critical of the proposed change.

However, the committee had also been critical of the overall thrust of the changes, concluding that the government's proposals were "unworkable as a whole".

"We conclude that the government's proposals will not for the most part achieve their key objectives of introducing greater speed, simplicity and certainty to the system," the MPs said.

However, Prescott said plans to reform the system would go ahead.

He said there would be an extra £350 million for the planning system over next three years, with the money linked to reform to ensure swifter decisions.

"I will give notice that if poor performance doesn't improve I will intervene."

There would also be changes to the processes of planning inquiries, but he pledged these would not prevent objectors making their case.

County councils would "underpin" new regional plans, but the counties would have no development plans of their owns.

And controversial plans for "business zones" will go ahead, establishing areas where developers can build without requiring specific planning approval.

They would deliver "growth, jobs and productivity without sacrificing the quality of development" said Prescott.

Prescott, whose office took over responsibility for planning following the break-up of the former transport and local government department, had come under intense pressure to retreat on some of the proposals.

Environmental groups including the Council for the Protection of Rural England (CPRE), Friends of the Earth and Transport 2000 had been among those calling for a rethink.

They branded the reforms "a major attack on the right of local people and their elected councillors to have their say about the future of their local environment".

The groups have criticised the greater centralisation of the plans, and have attacked the government for paying "far more attention to the voice of big business than the voices of communities and environmental groups".

The CBI initially welcomed much of what was in the green paper, but warned that some elements are "far too bureaucratic".

It has also criticised plans for levying higher charges on developers, describing the move as "a tax on business to fund general local authority spending".