The body that oversees elections has scrapped its decision to recognise the name of a new party set up by former Plaid Cymru politician Neil McEvoy.
The Electoral Commission is reconsidering whether to officially register the Welsh National Party.
It follows a threatened legal challenge by Plaid Cymru.
Mr McEvoy said the decision was shocking but Plaid Cymru said it was a recognition "the commission had acted unlawfully".
A spokesman for the party said: "Plaid Cymru will always protect its historic name and we are confident that this matter will be resolved in a manner that allows us to continue doing so."
Neil McEvoy was elected as a Plaid Cymru AM in 2016 but was later expelled from the party. After trying to reapply for membership and later abandoning his application, the independent politician set up his own party.
Although it got recognition from the Electoral Commission in January for the English name, the body refused to register the Welsh translation of Welsh National Party - Plaid Genedlaethol Cymru - because it said voters would find it confusing.
Plaid Cymru was founded as Plaid Genedlaethol Cymru in the 1920s.
Plaid threatened to take the commission to court for judicial review, claiming it was "irrational" to maintain the English language registration having rejected the Welsh language version.
The party argued officials had not given adequate reasons to explain why the English name Welsh National Party would be unlikely to cause confusion.
In a letter circulated by Mr McEvoy, the electoral commission said the decision to reconsider the application "means that the decision of 15th January 2020 to register your Party is of no effect and the Commission will now treat your application as a new application".
"I apologise on behalf of the Commission for the inconvenience caused to your party and assure you we will endeavour to complete procedure and reach a final decision as soon as reasonably practicable," it added.
Mr McEvoy, Member of the Senedd for South Wales Central, said: "We have complied with every regulation the Electoral Commission has and already submitted our quarterly electoral returns. We have done absolutely everything by the book. When the Commission rejected our proposed Welsh language name, claiming it could be confusing, we accepted the decision immediately and proposed a different one."
"For the Commission to simply deregister our party is truly shocking," he added.
The commission said: "We have received a complaint regarding the registration of the Welsh National Party. Having considered this complaint, we have decided to consider the registration application afresh, allowing interested parties to share their views on the application as part of the process."