Implementation of the part of the Charities Act 2006 that would make the Charity Commission the lead regulator of public charitable collections has been postponed indefinitely.
Nick Hurd, the Minister for Civil Society, told Third Sector that the measure, originally due to be brought into force last year, would be considered in a review of the act that was promised when it was passed and is due to begin next year.
Hurd said no decision had been made on whether the relevant part of the act would be implemented or not, "but both we and the Charity Commission have got other priorities".
The commission, which has suffered significant budget cuts, has said it would not be able to take on new duties without more resources.
Under existing legislation, both street and door-to-door fundraisers must acquire permits from the local authority and the Charity Commission has no licensing role.
Under part 3 of the act, both street and door-to-door fundraisers would be required to obtain Public Collection Certificates from the commission. Street fundraisers would still also require a local authority permit, but door-to-door fundraisers would only have to notify the relevant local authority.
Mick Aldridge, chief executive of the Public Fundraising Regulatory Association, said: "Existing legislation is completely unfit for purpose. Local authorities seem to regulate face-to-face on a case-by-case basis; the 2006 Act makes it clear that you cannot discriminate."
Louise Richards, policy and campaigns director at the Institute of Fundraising, said she was disappointed but not surprised by the delay, given the financial environment.