A 12-month scheme allowing most taxis to use bus lanes in Belfast - including new Glider lanes - has been put on hold.
It would have allowed Class A, private hire, taxis to use the lanes.
One firm insisted the latest decision will increase "traffic chaos".
Impact of incinerator ruling
Carl Bennett of East Side Taxis warned passengers may see an increase in fares, adding, "the decision has not been thought through".
The Department for Infrastructure said a recent court ruling on Stormont decision-making led to the deferral.
In July, the Court of Appeal upheld a ruling dismissing planning permission for the controversial Arc21 waste incinerator, and determined that Stormont's civil servants did not have the power to act without ministerial approval.
The Department for Infrastructure told BBC News NI it had "considered all representations received" in relation to a consultation carried out earlier this year about the "experimental" scheme, but added it could no longer go ahead with it due to the Arc21 ruling.
"The recent Buick judicial review judgement clarified the position regarding the decisions civil servants can and cannot take in the absence of ministers," a spokesperson said.
"It is that judgement which has led the department to defer the decision on the introduction of this experimental scheme.
"The outcome of the recent consultation and the rationale for an experimental scheme will be put to an incoming minister for infrastructure."
It added that taxi access in the bus lanes will remain limited to Class B (wheelchair accessible) and Class D (taxibus) taxis, as well as all buses, bicycles, motorcycles and the emergency services.
Sinn Féin MP Paul Maskey said the decision not to proceed with the scheme was "disappointing and frustrating".
"Taxi drivers across Belfast will, no doubt, be very angry at this decision, they are ordinary working-class men and women trying to provide for their families," he added.
"Overturning this decision will cause unnecessary problems for them."
Council to debate Glider
Meanwhile, around 80 people attended a meeting in west Belfast on Wednesday evening to discuss the impact of the new Glider system on those living and working in the area.
The network, linking east Belfast, west Belfast and the Titanic Quarter with the city centre, comes into operation on Monday.
A number of issues were raised, including the removal of parking spaces along the Andersonstown Road and changes to the location of bus stops.
One woman, whose home fronts on to the Falls Road, said she recently received a fine for parking outside her house.
A new 12-hour bus lane lies directly outside her home - the woman said she cannot even unload shopping from her car.
People Before Profit, which organised the meeting, is planning to bring a motion before Belfast City Council next week to highlight some of the problems, including the bus lane directly outside St Kevin's Primary School on the Falls Road.