A planned new charge for town centre business improvement districts (BID) has been scrapped amid fears it would push some of them into the red.
Birmingham City Council's Labour leadership proposed a new administration charge, dubbed the 'shoppers' tax' by Tory rivals, in its 2015/16 budget address.
But they were inundated with protests from BID managers throughout the city and have now agreed a U-turn.
The BIDs are official organisations which levy local businesses to fund additional services such as festivals, environmental improvements, anti-crime initiatives or street cleaning.
The proposed charges for the collection of the BID levy would have taken almost a quarter of the funding available to smaller suburban BIDs but only cost city centre BIDs like Broad Street between five and ten per cent of their budgets.
The charge, for the collection and processing of the BID levy, has now been dropped and council bosses have agreed to consult over future funding plans.
Coun deputy leader Ian Ward (Lab Shard End) said: "What was proposed would have impacted adversely on the smaller BIDs to the point where some may not have been viable.
"We have stopped the charge and will talk to the BIDs about how they are funded going forward. We will not introduce these charges, except at the point where a BID is renewed or a new one is launched."
BIDs are renewed through a vote of local businesses every five years.
Conservative group leader Coun Robert Alden, who named the charge a 'shoppers' tax' in his opposition budget address earlier this month, welcomed the decision and said he would ensure there was no reversal after the election.
Coun Alden, who is a director of Erdington BID, said: "Here in Erdington, the council stopped cleaning their car parks and expected the BID to fund this.
"We put forward a strong case for why the Labour council should drop the tax at the budget meeting, including whether it was even legal.
"Thankfully, for local high streets across the city, they have listened and scrapped it for this year."
He said it was deeply unfair that Erdington would have lost almost 28 per cent of its funding while Broad Street only 5.78 per cent.
The draft charges for the 'shoppers' tax' would have meant the following reductions in BID funds for local centres:
Acocks green - 23.37 per cent
Broad Street - 5.78 per cent
Colmore - 4.93 per cent
Erdington - 27.91 per cent
Jewellery Quarter - 9.70 per cent
Kings Heath - 23.80 per cent
Northfield - 23.92 per cent
Retail (city centre) - 7.48 per cent
Southside - 8.17 per cent
Sutton Coldfield - 12.11 per cent
Soho Road - 24.30 per cent