Ministers will be free to campaign on either side of the referendum on Britain’s continued membership of the EU, Downing Street sources said.
David Cameron has been under mounting pressure to suspend cabinet “collective responsibility”, with several senior eurosceptic figures thought to be ready to quit if they were forced to back an “in” vote.
But they will not be allowed to break ranks until the UK prime minister has secured a renegotiation deal with fellow EU leaders.
Such a deal cannot happen until at least next month’s summit.
Details of the policy are expected to be set out by Mr Cameron when he reports to the Commons this afternoon on December’s summit, at which hopes of securing an early agreement were dashed.