The announcement by Home Secretary Charles Clarke on Monday means that so-called control orders would now have to be imposed by a judge, rather than himself.
It comes just two months after previous anti-terror laws, which these were intended to replace current legislation, were struck down by Britain's highest court of appeal which ruled that they broke human rights obligations.
The control orders, which can range from electronic tagging to a form of house arrest, are contained within the Prevention of Terrorism Bill which ministers are rushing through parliament before the old powers lapse in mid-March.
In emergency cases, police would
be able to detain suspects
Critics had charged that not only was the law being pushed through with unseemly haste, but that it went against centuries of constitutional precedence in letting politicians order house arrest purely on the basis of suspicion.
In a letter to his opposition counterpart, the Conservative Party home affairs spokesman David Davis, Clarke gave way on this key point.
Clarke explained that the original plan to have control orders only reviewed by a judge within seven days of their imposition by himself would be changed.
"I propose to amend the bill so as to provide for ... control orders to be made by a judge in the High Court rather than as now by the Secretary of State (Home Secretary)," the letter said.
In emergency cases, however, police would be able to detain suspects pending the judge's decision, it added.
"We are being asked to pass this legislation which is of huge constitutional and legal significance - and we are being asked to do it on the basis of promises which will be fulfilled elsewhere"
Conservative Party's legal affairs spokesman
Despite the concession, Clarke managed to enrage MPs all over again by saying in his letter that the bill should be rushed through the House of Commons as it stood, and then amended by the unelected upper chamber, the House of Lords.
Members of the Commons, who were on Monday debating the bill, slammed the government for treating the legislature with contempt.
"We are being asked to pass this legislation which is of huge constitutional and legal significance - and we are being asked to do it on the basis of promises which will be fulfilled elsewhere," Conservative legal affairs spokesman Dominic Grieve said.
The debate has been particularly charged given a looming general election, widely expected for 5 May, with all parties keen to avoid charges that they are soft on national security.