The controversial criminal courts charge for convicted defendants is to be scrapped from 24 December, lord chancellor Michael Gove announced today.

In a ministerial statement to parliament, Gove said that the Ministry of Justice will review the entire structure of court-ordered financial impositions for offenders.

He stressed that the basic principal behind the policy to make offenders contribute towards the costs of seeing justice is done was right, and said the review will seek alternative ways of ensuring ‘criminals pay their fair share’.

He said: ‘This review will seek to achieve three goals: giving the judiciary greater discretion in setting financial impositions; making financial penalties a more effective tool in delivering improved non-custodial sentences; and ensuring that money raised through financial penalties plays an appropriate - and sustainable - role in supporting taxpayers to meet the costs of running the courts.’

Speaking to the Magistrates Association today, Gove said: ‘If you’ve deliberately broken the law, if the taxpayer has to shell out to ensure justice is done, and if you have the means, then there can clearly be a case for the court imposing a financial penalty.

'But it has become clear that while the intention behind the policy was honourable, in reality that intent has fallen short.’

He said that he hoped the review of the 'complex and confusing' array of sanctions and penalties courts can impose will bring greater simplicity and clarity.

The courts charge has attracted widespread criticism since it was introduced in April. More than 50 magistrates have resigned in protest and critics argue it is encouraging innocent people to plead guilty to avoid higher costs.

Last month the justice committee of the House of Commons called for its immediate abolition after it said it had ‘grave misgivings’ about the operation of the charge. Meanwhile, the lord chief justice Lord Thomas of Cwmgiedd said the charge had ‘not gone correctly’ and should be looked at again.

Defendants are charged £150 for a guilty plea in a magistrates’ court and £520 if convicted following a not-guilty plea.

Gove said the charge will be scrapped on 24 December following mounting pressure against the reform since its introduction.

Law Society president, Jonathan Smithers, said: ‘The Law Society has consistently raised grave concerns publicly and directly with government about the threat posed to fair trials by the criminal courts charge.

‘This fee created a perverse incentive on those accused of wrongdoing to plead guilty when they were not because they could not afford to pay these often high and disproportionate fines.’

Malcolm Richardson, national chair of the Magistrates Association, said: 'This is fantastic news and we're very grateful to Mr Gove for listening to the case made by magistrates about the charge. In all my years on the bench, I've never seen something strike so hard at the heart of justice.

'Although we have lost many experienced magistrates, there will be an enormous sense of relief across the criminal justice system.’

Welcoming the decision, Bar Council chairman-elect, Chantal-Aimée Doerries QC, said: 'The charge created a perverse incentive to plead guilty, negated the principle of judicial discretion, reduced compensation awards and was never likely to raise the funds anticipated.’

Since his appointment in May, Gove has ditched many of his predecessor Chris Grayling’s most controversial policies.

These include: restrictions on prisoners receiving books; plans to spend £85m on a mega-prison in Leicestershire for young offenders; and selling British prison expertise to regimes with appalling human rights records.

Speculation has been rife for some weeks that the criminal courts charge would be next. One of the plans floated as an alternative is to impose a levy on top City firms to replace any revenue lost.