Romania's government has scrapped a controversial decree that would have shielded many politicians from prosecution for corruption.
The decision came at an emergency meeting on the issue, following days of large street protests.
One of those behind the move said it was to restore calm in Romania, but also strongly criticised the judiciary.
Protesters have vowed to keep the pressure on the cabinet, with some demanding the entire government quits.
"I hope that this is a real repeal... We are going to keep an eye on them to make sure we are not being had," one protester, Daniel, told the news agency AFP.
The decree was passed on Tuesday and was due to come into effect on 10 February.
The protests have been the country's largest since the fall of communism in 1989.
Calin Tariceanu, leader of the Senate and a former prime minister, told the BBC the decree was well-intentioned, but had to be withdrawn to re-establish calm in the country.
He also strongly criticised the judiciary, saying he did not consider it to be independent.
"This is a clear issue which has to be addressed in future," he said.
The tricky road ahead, by the BBC's Nick Thorpe in Bucharest
The decision to back down was made on Saturday by Liviu Dragnea, leader of the governing Social Democratic Party, at the suggestion of Calin Tariceanu, leader of the junior coalition partners, the Alliance of Liberals and Democrats.
Prime Minister Sorin Grindeanu approved and then announced the decision.
The justice ministry has been instructed to draft a new law to tackle the issues raised by the original decree, and to initiate a wide public debate.
The government will have to steer a careful line between provoking more protests, and losing as little face as possible among the four million people who voted for them in the December elections.
A planned conference to announce the repeal was cancelled, with sources saying an official statement would be released soon.
The decree would have decriminalised abuse of power offences where sums of less than €44,000 (£38,000; $47,500) were involved.
The constitutional court has still to rule, later this week, on the legality of the original decree.
One immediate beneficiary would have been Liviu Dragnea, head of the governing Social Democrats (PSD), who faces charges of defrauding the state of €24,000.
The government had earlier argued that the changes were needed to reduce prison overcrowding and align certain laws with the constitution.
But critics saw it as a way for the PSD to absolve officials convicted or accused of corruption.