Westminster City Council has decided to scrap plans for bringing an external market operator in to take over running Berwick Street Market.
Campaigners including Joanna Lumley have been protesting the plans to privatise what is one of London's oldest street markets.
Councillor Robert Davis said: “In light of the on-going community concerns, including the public petition submitted last year and as a result of thorough discussions with officers and the ward councillors, I feel there is a need to halt the current tendering process for the management of the market and reflect further on alternative ways to improve the market."
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“My grandfather used to own a shop in the market in the 1960’s and I recall visiting on numerous occasions in my childhood a vibrant and popular market.," Davis added.
"Therefore I want to consult further and look at ways that will improve the market that takes all the local traders, residents and visitors with us, so as to return the market to its former glory.
“It therefore remains my firm conviction that markets can play a key role in the economic and social life of Westminster’s neighbourhoods and Berwick Street in particular can once again become a thriving market adding to the vitality of Soho as the jewel in the golden crown that is at the heart of our great City of Westminster.”
Labour Councillors and the West End Labour Action Team have welcomed Westminster City Council’s decision.
Labour councillor Paul Dimoldenberg said: “We now want to know what new resources will be brought in to the council to manage Berwick Street Market properly and what new investment will be put into the market so that it has the necessary facilities to make it a success once again.”