Plans to introduce parking charges in Richmond and Bushy Royal Parks in west London are to be scrapped.
Tourism and Heritage Minister John Penrose said he had taken the decision following fierce public opposition.
Under the plans drivers would have paid between 50p and £3 a day, but the government will now look at alternative ways of raising money.
Richmond Councillor Clare Head said it was an excellent result which "shows what people power can do".
"Making people pay to enjoy one of our beautiful natural open spaces is completely unfair and would have led to traffic chaos in roads around the park," she said.
Mr Penrose said after discussing the issue with local MPs, who had been lobbying hard, and the mayor's office, he had decided to scrap the idea immediately.
He has also written to the MPs confirming his plans.
He added: "Given the current economic climate, we will need to find alternative sources of income instead, but we will try to respect local residents' views and preserve the environment of these wonderful and precious spaces too."
Work on resurfacing the car parks in Richmond Park will also be scrapped to retain their rural character.