Plans to scrap GCSEs in key subjects in England and replace them with English Baccalaureate Certificates are being abandoned by the government.
The reversal was announced by the education secretary in the Commons, alongside curriculum changes.
Michael Gove said plans for the new exams had been "a bridge too far".
He had wanted to bring in what he said were more rigorous exams in some core subjects from 2015, but faced criticism from MPs and teachers.
Labour's shadow education secretary Stephen Twigg told MPs the announcement was a "humiliating climb-down" and exam policy a "total shambles".
The change means plans for the new qualification, announced in September, are being shelved, while GCSEs are retained, despite having been previously condemned by the education secretary.
The reversal has refocused the spotlight on the future form of GCSEs .
It comes after a damning report by the Commons education committee which said the changes would mean "too much, too fast" and could threaten exam quality.
The new English Baccalaureate Certificate was billed by the government as having a tougher syllabus, with exams at the end of the course in a return to an O-level style traditional qualification.
Mr Gove told MPs: "Last September we outlined plans for changes to GCSE qualifications designed to address the grade inflation, dumbing down and loss of rigour in those examinations.
"We have consulted on those proposals and there is now a consensus that the system needs to change.
"But one of the proposals I put forward was a bridge too far."
Specifically, he said that proposal had been to let just one exam board set a GCSE for each English Baccalaureate Certificate. The idea behind this was to stop what he had called a "race to the bottom" where he said exam boards might compete to offer easier qualifications.
However, he also re-stated his belief in changes already being made to GCSEs, where there has been a switch to exams being taken at the end of two years rather than in stages, fewer re-sits and a reduced role for coursework.
And he said a tougher GCSE in some key subjects would come in from autumn 2015.
Liberal Democrats had opposed the introduction of the English Baccalaureate Certificate, believing they would bring in a two-tier system, which would damage teenagers who were not academic enough to pass the new exams.
A senior Whitehall source told the BBC's political editor Nick Robinson a range of factors conspired to bring an end to the plans, including opposition from the regulator and concerns that introducing a single exam board for each subject could be challenged in the courts under European Union rules.
Lib Dem sources indicated they regarded this as a coalition decision not a policy victory for their party, our correspondent added.
In the Commons, Labour's Stephen Twigg said: "It's simple really, before he announces a bright idea wouldn't it be sensible to check it first with the deputy prime minister".
The proposals for the new qualifications were met by intense criticism from teaching unions when they were first floated last June and then set out in detail in September.
The original plan had been for the first candidates to start courses in 2015 and take the new-look exams two years later, initially in three core subject areas - English, maths and sciences - with an extension later to history, geography and languages.
There was a plan to have one exam board for each subject.
Doubts had been raised about the feasibility of awarding the franchises for subjects within the timetable set for the new qualifications, which were to be taught from autumn 2015.
Exam regulator Ofqual had written to Mr Gove suggesting this should not go ahead at the same time as the other changes planned for GCSEs and A-levels.
Last week a report from the Commons Education Select Committee issued a "red light" warning to the government, urging it to slow down and rethink its proposed changes to GCSEs and the exam system.
The cross-party report warned the proposed changes were being rushed and risked damaging the exam system.
MPs' criticisms had been echoed by teachers and head teachers' unions.
In the Commons, Mr Gove also announced changes to the performance measures used in school league tables.
There will be a new eight-subject measure of GCSEs, including English and maths, three subjects out of sciences, languages, history and geography and three other subjects, such as art, music or RE.
This will in effect be a wider version of the English Baccalaureate measure, which some have criticised as being too narrow, although that measure will remain.
Russell Hobby, leader of the National Association of Head Teachers, said the government had "slammed on the brakes just before the cliff face".
He said it would have been impossible to implement what had been planned.
The announcements on abandoning the new qualifications come alongside the publication of changes to the curriculum for primary and secondary schools.
Mr Gove has already set out principles arguing there should be a clear set of core information pupils should learn in areas such as maths, science, history and literature.
Programmes of study in almost all subjects except for primary English, maths and science have been slimmed down.
Earlier, Labour's shadow education secretary Stephen Twigg told BBC Radio 4's Today programme: "This is a humiliating climb-down for Michael Gove but more important than that it is really good news for education.
"The proposal risked turning the clock back to the kind of exam system that we had when I was at school that wrote a lot of young people off at 14 but it also crowded out a lot of very important parts of the curriculum."
The general secretary of the National Union of Teachers (NUT), Christine Blower, said she was delighted Mr Gove had made a U-turn.
"We have amassed a very big coalition of our own around the fact that introducing the Ebacc was entirely the wrong thing to do, certainly in the kind of timescale that Mr Gove had in mind, so we think this is a very good move and we're very pleased."