The government has decided not to enact reforms to the lobbying act put forward by the Conservative peer Lord Hodgson of Astley Abbotts, Third Sector understands.
The decision was taken because there was not enough space in the legislative programme to pass the necessary law, sources said.
The lobbying act sets spending limits and makes it a legal necessity for all organisations that spend more that £20,000 in England or £10,000 in Wales on regulated campaigning in the year prior to an election to register with the Electoral Commission.
Hodgson’s review of the lobbying act, which was commissioned by the government and published its recommendations last year, called for a number of reforms, including reducing the regulated campaign period to four months before an election and changes to the rules on joint campaigning.
The review also recommended that the scope of the lobbying act be reduced to include only activity intended to influence how members of the public vote.
Last month more than 100 charities called on the charities minister, Tracey Crouch, to enact Hodgson’s recommendations.
A number of letters have in the past been sent to the government by charity sector representatives and organisations opposing the lobbying act, and Labour included a promise to repeal the act in its general election manifesto.
But Third Sector understands that the Cabinet Office has decided not to enact Hodgson's proposals, despite opposition to the act from across the charity sector.
A spokeswoman for the Cabinet Office said: "The rules on third-party campaigning in elections ensure that activity is transparent and prevent any individual, company or organisation exerting undue influence in terms of an election outcome.
"We recognise and value the role that charities play in our society and are keen to work with voluntary bodies to ensure the rules are well understood."
Tamsyn Barton, chief executive of the umbrella body Bond, said it was "deplorable" that the government was not taking up Hodgson’s recommendations.
"How are charities supposed to speak up for the most vulnerable and marginalised people in society, both here and globally, when they are at risk of being penalised by the lobbying act?" she said.
"The government is legislating the sector into silence at a time when our voices are needed the most. This is a terrible day for British democracy."
Vicky Browning, chief executive of the charity leaders body Acevo, said that without Hodgson’s reforms the lobbying act restrictions remained "deeply intimidating".
She said: "If these restrictions remain in place they risk dampening the confidence and ability of charities to speak out about the biggest social, political and economic changes this country has seen for more than half a century."
Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, called on the government to reconsider.
"The failure of the Cabinet Office to address this issue is unacceptable," he said.
"The government made a clear commitment to reviewing the impact of this law, and to now reject any changes out of hand can only weaken the voice of those that charities serve. These reasonable and considered recommendations were recently endorsed by politicians from all parties in the House of Lords, and the government must reconsider."
Ben Russell, director of communications at the Charities Aid Foundation, said the reforms would have mitigated some of the worst effects of the legislation and the government’s refusal to implement them was "very disappointing".