A ban on landlords evicting small businesses like shops and bars triggered by the Covid-19 pandemic last year has been extended to March 2022.
The block on commercial evictions, which stops landlords from taking tenants with rent arrears to court, had been due to end on June 30.
But the Treasury has now scrapped the deadline and imposed a new cut-off date of March 25, 2022.
It comes after UK Hospitality and the British Retail Consortium sounded the alarm over a combined £5bn in rent debt across both sectors.
Minister Steve Barclay announced a new arbitration system between landlords and tenants and told MPs: "In recognition of the importance of jobs in the many affected businesses at the heart of local communities, we launched a call for evidence in April on further actions to take to resolve those debts.
"As a result of that call for evidence, the government now plans to introduce legislation to support the orderly resolution of these debts that have resulted from Covid-19 business closures.
"We will introduce legislation in this parliamentary session to establish a backstop so that where commercial negotiations between tenants and landlords are not successful, tenants and landlords go into binding arbitration.
"Until that legislation is on the statute book existing measures will remain in place, including extending the current moratorium to protect commercial tenants from eviction to the March 25 2022."
On Monday, Prime Minister Boris Johnson extended the remaining lockdown restrictions until at least July 19 amid concerns over the spread of the Delta variant, which was first identified in India.
More than 1,100 UK nightclubs remain unable to reopen, while thousands more hospitality and leisure firms have seen trading constrained by virus curbs.
Hospitality leaders had called on the government to extend the current rent moratorium and provide further financial support.
Data for the first quarter of 2021 has revealed that only 74% of rent was collected by landlords 60 days following the end of the period after tenants were battered by the pandemic.
Kate Nicholls, UKHospitality’s Chief Executive, said “We welcome these measures as they will banish a grim shadow that has hung over hospitality since the Covid crisis began.
"This legislation will form a strong bedrock for negotiated settlements that can help heal the damage that the pandemic has wrought, and we are pleased that the government has listened to our sector, and acted to ease its plight by bringing in an equitable solution where both landlords and tenants share the pain.”
Helen Dickinson, Chief Executive of the British Retail Consortium, welcomed the news, adding that while most retailers had reached an agreement over rent, some two thirds would face threats of legal action from landlords if protections were lifted.
Hospitality, leisure and retail operators have also benefited from a business rates holiday since the start of the crisis.
However, the Treasury is expected to continue with plans to change this to a 66% discount with a £2 million cap from the start of next month.
The government is also not expected to alter planned changes to the furlough scheme following the delay.
Currently, the state will cover 80% of wages until the end of this month, with this tapering to a 70% subsidy next month with at least 10% covered by employers, and reducing until it is removed at the end of September.
