Ministers had hoped to help address the housing shortage and aid the economy by allowing firms to turn empty offices into homes under permitted development rights, meaning that planning permission would not be required.
However, groups including the Planning Officers Society (POS), the Royal Town Planning Institute (RTPI), umbrella group London Councils and the Local Government Association (LGA) criticised the plans during a public consultation on the proposed changes to use class orders that ended in June.
Newspaper reports last week claimed that the government is watering down the plans following the widespread opposition from council planners.
This week, a member of the expert panel advising the Department for Communities and Local Government (DCLG) on planning issues told Planning that he had learned "through conversations with government officials" that the department has decided against introducing the proposals via secondary legislation, electing instead to put them into the NPPF.
Roger Hepher, head of planning and regeneration at consultancy Savills and a member of the DCLG's planning sounding board, said: "My understanding is that ministers have listened to the concerns expressed by various groups in their consultation responses. They've realised that the proposals were a blunt instrument that would have had unintended negative consequences."
These consequences could have included creating homes in commercial areas severely lacking in residential amenities and prompting new residents to object to noise from neighbouring industrial occupiers, he said.
Legislation would have been necessary to amend the General Permitted Development Order to allow office to residential conversions without planning permission. Hepher said: "All ministers can really do through the NPPF is to advise planning authorities not to object to applications of this kind. This is a substantial watering down because advice is only advice, and authorities could choose to follow it or not."
A DCLG spokeswoman said: "The government has consulted on proposed changes to use class orders and is now considering responses before deciding on the way ahead."
Andrew Whitaker, planning director of trade body the Home Builders Federation, said: "I can imagine that having influential groups of practitioners like the RTPI and the LGA opposing the plans would have concerned ministers.
"They might have decided that to change the legislation to permitted development would have been a step too far, whereas including them in the NPPF would be more acceptable."
Case Study: London
Developer Grainger has recently completed a project to convert 560 square metres of vacant office space on the lower floors of Ability Towers in Islington into seven flats.
The firm bought the building in 2005. It refurbished the offices and marketed them but could not find commercial tenants. The space has been vacant since it was built in 2003.
In 2008, Grainger decided to try to convert the offices into homes, but this required planning permission. The homes - a mix of sale and rental - have just been completed.
The developer maintains that it could have got these flats on to the market several years earlier under the permitted development rights originally proposed by the government.
The local planning authority for the building, the London Borough of Islington, did not respond to requests for its view on how its procedures affected the scheme's progress.