The Government will scrap plans to award legal aid contracts to the lowest bidders following criticisms it would reduce justice to a "factory mentality", it has been reported.
Justice Secretary Chris Grayling ditched the proposals after drawing up the Government's latest legal aid reforms with the support of the Law Society, The Times reported.
Barrister-turned-MP Karl Turner had earlier raised fears that price-competitive tendering for legal aid would allow multinational firms to provide justice at the cheapest cost.
The Labour MP had told MPs he believed it would lead to private companies such as G4S and Serco dominating the legal aid market at the expense of smaller firms who possess greater expertise.
Instead, law firms seeking a legal aid contract will be subject to certain criteria and sustainability but price will not be a factor, the newspaper said.
Mr Grayling said he would also lift a cap on the number of contracts to be awarded, which law firms feared could have closed 1,200 businesses.
Under the new draft proposals legal aid is to be slashed for prisoners, foreigners and the wealthy in a move which could help the Government save £220 million a year, The Times reported.
Legal aid will not be granted in 11,000 cases brought to court by prisoners each year, and new residency tests will be introduced to ensure only people with strong UK connections can receive civil legal aid, the newspaper said. Defendants with an annual disposable income of £37,500 a year and at least £3,000 to spare each month after paying essential bills would no longer receive automatic legal aid.
Mr Grayling told The Times: "Not everyone will be happy because change is never welcome, when it is a tough change like this and with a big financial element. But I hope the public will see (the package) as providing a sensible balance between saying 'no' to legal aid to people they really would not want to get it; and ensuring that anyone who is arrested and in a prison or police cell has access to a lawyer to defend them."
Mr Grayling also told the newspaper that he intends to set up a working party made up of the Law Society, Bar and judiciary to investigate ways to cut the cost of brief hearings at magistrates' and Crown courts. Ideas include carrying out pre-trial hearings via video-link or email to avoid defendants and their lawyers travelling long distances.