A charge levied on convicted criminals will be scrapped within weeks following an avalanche of criticism.
The fee will no longer apply from December 24, Justice Secretary Michael Gove has announced.
Since April those convicted of offences in England and Wales have had to pay a charge between £150 and £1,200.
The criminal courts charge was introduced by Mr Gove's predecessor Chris Grayling during the coalition government to help towards the running of the courts system.
However, it drew widespread opposition from lawyers and campaign groups, while more than 50 magistrates are understood to have resigned in protest.
Critics claim the fee created a "perverse incentive" to plead guilty. Some defendants are said to have attempted to admit charges even though they claim to be innocent in order to pay the minimum amount rather than risk a steeper penalty if they are convicted after a trial.
Last month a report by MPs criticised a lack of discretion for judges and magistrates on whether to impose the charge and if so, at what level.
The Commons Justice Committee cited the case of a woman who admitted stealing a four-pack of Mars Bars worth 75p, saying she "had not eaten in days" after her benefits were sanctioned.
She was ordered to pay a £150 criminal courts charge on top of her £73 fine, £85 costs, a £20 victim surcharge and 75p compensation.
Mr Gove announced the scrapping of the charge just seven months after it was introduced at a meeting of the Magistrates Association Council in London.
He said the charge was introduced "for the best of reasons - to ensure that those who impose costs on the criminal justice system make a contribution to those costs wherever possible".
He added: "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."
Offenders handed the fine since it was introduced and those convicted up until it is officially scrapped will still be required to pay, with collection of money owed set to continue well beyond Christmas Eve.
Early indications are that only a "very small proportion" of the fines imposed have been collected, the justice committee report said. It was not known how much this was due to an inability to pay or the use of long-term payment terms.
Malcolm Richardson, national chairman of the Magistrates Association, hailed today's announcement as "fantastic news".
He added: "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."
It is the latest in a series of policies from the coalition government ditched by Mr Gove since he took over the brief following the election.
Shadow justice secretary Lord Falconer said: "Michael Gove should be devoting his time to tackling the violence, drug abuse and overcrowding which is rampant in our prison system, rather than having to run around cleaning up the mistakes of Chris Grayling."
Mr Gove also announced a wider review into financial orders currently imposed on offenders, which include fines, a victim surcharge, compensation, prosecution costs and the criminal courts charge.
The Justice Secretary said the array of sanctions and penalties is "complex and confusing".