Labour has been accused of waging a “war on motorists” by scrapping plans to limit the number of new Low Traffic Neighbourhoods.
Ministers have reportedly ditched reforms that would have curbed councils from also introducing 20mph zones, as well as “unfair” fines and parking charges.
The Conservative Party, which drew up the changes under Rishi Sunak, branded the move “a kick in the teeth” to drivers.
But Labour dismissed the proposals as “speculative suggestions” and said they “would have made no positive difference for drivers”.
Prime Minister Sir Keir Starmer has faced criticism for his support of heavy-handed policies against car owners, particularly in London.
Richard Holden, the shadow transport secretary, said London Mayor Sir Sadiq Khan will be “licking his lips now he has been given the green light to hammer drivers even more”.
He told The Sunday Telegraph: “Labour has been caught red-handed as it steps up its targeted war on motorists.
“Conservatives led the charge against unfair and over-zealous enforcement but our work has been ripped up in underhand attacks without any public consultation or manifesto pledge.”
Two years ago, Sunak announced a “Plan for Drivers”, which would have forced councils to hold a minimum series of public meetings to hear the views of residents and businesses.
The Tories also planned to revoke council’s access to DVLA data, which they use to enforce traffic filters.
But Lilian Greenwood, the roads minister, said work had been “put on hold and the Government is now considering appropriate next steps”.
She said: “As has always been the case, local authorities are responsible for managing their roads and are accountable to their communities.”
Ms Greenwood added that Tory plans to allow residents the formal right to challenge parking policies, such as yellow box penalties, “would have made no positive difference”.
A Department for Transport spokesman said: “The Government is absolutely on the side of drivers, focusing on making journeys safer and smoother, and saving motorists money.
“Over the past year alone, we invested an extra £500 million to help local authorities resurface roads and fix seven million potholes, reducing congestion and saving drivers up to £600 a year in repairs.
“We’ve also committed £1 billion to repair bridges, flyovers and tunnels, and greenlit over 30 road schemes to improve journeys.
“Meanwhile, we are making our roads safer to drive on and will set out the next steps for the first road safety strategy in over a decade in due course.”
