The Government has bowed to pressure and annouced it will drop increases of up to 500 per cent in court fees for asylum and immigration cases.

The unexpected U-turn from the Ministry of Justice (MoJ) to “take stock” comes after overwhelming opposition to the hike in tribunal fees, which were introduced earlier this year to raise around £34m a year.

The original policy – branded “reprehensible” by campaigners – meant that fees for such cases to the first-tier tribunal increased from £140 to £800 for a hearing. The policy also introduced, for the first time, fees for appeals.

In April this year the Law Society warned there was a “serious risk” the fees could prevent many people from challenging incorrect Home Office decisions.

The decision on Friday means that, until the review into the level of immigration tribunal fees by the MoJ is concluded, it will apply fees at the previous levels and make refunds to those who have paid under the new scheme.

In a written statement, Sir Oliver Head, a justice minister, said: “We have listened to the representations that we received on the current fee levels and have decided to take stock and review the immigration and asylum fees, to balance the interests of all tribunal users and the taxpayer and to look at them again alongside other tribunal fees and in the wider context of funding for the system overall.”

“From today all applicants will be charged fees at previous levels and we will reimburse, in all cases where the new fees have been paid, the difference between that fee and the previous fee.

“We will bring forward secondary legislation to formalise the position as soon as possible. That legislation will come into force shortly, but in the meantime the changes will be effected through the use of the Lord Chancellor’s discretionary power to remit or reduce fees.”

Tim Farron, the Liberal Democrat leader, told The Independent: “The Government has sneaked out this massive U-turn on a Friday, just after the Autumn Statement, hoping that no one would notice. The Government must have finally listened Liberal Democrat opposition to their proposed 500 per cent increase in immigration tribunal fees.

“But it’s plans like this that simply remind people why the Tories were thought to be the nasty party, picking on the voiceless and those who cannot be heard.”

Bob Neill MP, chair of the influential justice committee, said: “On behalf of the justice committee I warmly welcome the Government’s decision. We concluded in our recent report that the cost-recovery aim of the proposed six-fold increases would not be realistic; that there was a danger that the increases would deny vulnerable people the means to challenge the lawfulness of decisions taken by the state; and that it was unwise for the Government to have brought forward these proposals before its review of the impact of employment tribunal fees has been published.

“It is very good to see the Government prepared to listen and take action as a result.”

Welcoming the U-turn by the MoJ, the Joint Council for Welfare Immigrants tweeted: “Great news as the Government rolls back on immigration tribunal fees increases! We will keep pressing for access to justice as the review approach.”

Richard Burgon, the shadow Justice Secretary, added: “This is a significant climb down by a Conservative Government that has done so much to deny access to justice to thousands of people, particularly those on lower incomes.

A MoJ spokesperson added: “The cost of our courts and tribunals on the taxpayer is unsustainably high. Those using the system, and who can afford to, should pay more to relieve this burden – immigration and asylum cases are no different.