Plans to overhaul Sunday trading laws in England and Wales have been dropped, after they were rejected by MPs.

The Commons opposed proposals to allow councils to extend opening hours by 317 votes to 286.

In the biggest proposed shake-up for 20 years, ministers wanted to give the 353 councils in England and 22 in Wales the freedom to determine opening hours for large shops in their area.

The government had hoped to relax existing restrictions on Sunday trading, which limit large shops to opening for a maximum of six hours, by devolving responsibility to local councils.

This will come as welcome news to the Keep Sunday Special (KSS) campaign, which last month urged retailers to attend a mass lobby of parliament, in a bid to persuade MPs to vote against changes to Sunday trading legislation.

KSS said the plans would “chip away” at Sunday’s special status and put undue pressure on workers.

Angela Eagle, shadow business secretary, said: “We support the current arrangements, which work well and mean retailers can trade, customers can shop, and shopworkers can spend time with their families.”