Controversial new laws to detain people with untreatable personality disorders, even if they have not committed a crime, are set to be abandoned.
Mental health campaigners have raised objections
Ministers will concede they cannot get the Mental Health Bill Parliament, and so will try to amend existing laws.
Mental health charity Mind backed the predicted scrapping of the bill.
But Mind said it could oppose new plans on how long people with personality disorders would be locked up without appeal if it considered them excessive.
The Mental Health Bill had proposed allowing people to be held for 28 days before facing a tribunal.
Mind policy director Sophie Corlett said she was very concerned with what might replace the Bill.
"If they simply take all the bits of the draft (bill) that they have been working on all this time and stick them on to the previous Act ,we will simply end up with a piece of legislation that doesn't fit together but will have all the problems with the previous legislation."
She said the government was now considering plans for up to 42 days' detention for some mentally ill patients without referral to a tribunal.
"Even suspected terrorists only get 28 days in this country," Ms Corlett told BBC Radio 4's Today programme.
"Forty-two days for somebody who is ill, who somebody suspects might be a danger - this is all based on the assumption that people with mental health problems are dangerous to society.
"And on a second assumption that you can predict who those people are going to be - both of which assumptions are absolutely false."
BBC home affairs editor Mark Easton said proposals beyond the bill's 28 days would be likely to face a challenge under human rights legislation.
Mr Easton said the Mental Health Bill was "always a bill with huge problems - it was trying to do two quite contradictory things".
Michael Stone's 1998 conviction for the brutal murders of Lin and Megan Russell first prompted the government to propose new laws.
Stone was regarded as a dangerous psychopath but, because his condition was untreatable, he could not be held under mental health powers.
Ministers wanted to widen the scope for locking up people with personality disorders, while also needing new rules to comply with the Human Rights Act 1998.
"When they tried to merge these two ideas, they ended up in an unholy mess," Mr Easton said.
He said the bill foundered because the proposal to allow everyone held to appeal to a tribunal within 28 days, alongside a likely increase in the number of people detained, suggested a vast bureaucracy would be needed to process appeals.
Objections from some politicians and mental health campaigners were raised and ministers decided not to back the legislation.