Hidden cameras in areas of Birmingham with large Muslim populations will be removed and any counter terrorism involvement stopped, police say.
A total of 218 cameras - 72 hidden - were put up in the Washwood Heath and Sparkbrook districts and paid for from a Home Office counter-terrorism fund.
Residents said they were not consulted about it.
Sharon Rowe, Assistant Chief Constable of West Midlands Police, apologised and said "mistakes had been made".
The CCTV and number plate recognition cameras have not been switched on and officials involved promised full public consultation last month.
About 300 people attended a public meeting at the Bordesley Centre in the Sparkbrook area of the city on Sunday to discuss the issue.
Senior police, council officers, politicians and civil liberty campaigners addressed the audience as well as campaigners fighting to get the cameras removed.
The cameras were put up as part of a scheme called Project Champion.
Of these, 106 were Automatic Number Plate Recognition (ANPR) devices which were able to record registration plates as vehicles moved around the areas.
Home Secretary Theresa May said on Sunday there should be tighter regulation of ANPR cameras while the government is to look at limiting access to the database that logs more than 10 million vehicles every day.
In April, the Safer Birmingham Project (SBP) - made up of city councillors, police representatives and other agencies - said it had received £3m from the Home Office to improve community safety and reduce crime in the Washwood Heath and Sparkbrook wards.
But it later emerged the money came through the Terrorism and Allied Matters (TAM) fund, which is administered by the Association of Chief Police Officers' (Acpo).
The SBP said although the counter-terrorism unit secured the funding, the camera sites were chosen on the basis of general crime data - not just counter-terrorism intelligence.
Jackie Russell, director of the SBP, told BBC News at Sunday's meeting that there was never any intention to deceive.
"It's not lies and more lies," she said.
"I have to say that everybody I have been engaged with on this project from the start has no intent to do this.
"We would not choose to be here and we would not have chosen this course."
The assistant chief constable said it was now important to see how everyone involved can move forward.
"I accept we've made mistakes, especially around the consultation," she said.
"My job now is to see what we can do moving forward together."
Bags will eventually be placed over the cameras and currently signs have been put up saying "Cameras Not In Use".
Speaking after the meeting, Liberty director Shami Chakrabarti said: "The scheme was an own goal from the police.
"I think that we saw that accepted by the assistant chief constable.
"This isn't Project Champion any more trust me, this is Project Humble Pie."