Powers to hear evidence in secret in civil courts will not be extended to inquests, the Justice Secretary has said.
The Government is to publish a bill which includes rules on controversial proceedings to hear some evidence secretly where national security is involved.
But in a climbdown from earlier proposals, the powers will not be extended to inquests after Justice Secretary Ken Clarke said they were "too broad".
The Justice and Security Bill , due to be published by the Ministry of Defence later, has been watered down and will dictate that sensitive evidence will only be heard in secret if national security is deemed to be threatened.
Judges will make the final decision on whether proceedings are held behind closed doors.
MI6 spies recently gave evidence in the inquest of Gareth Williams, the MI6 code-breaker whose body was found in the bathtub of his central London flat.
Mr Clarke told Sky News: "The judge will decide that and all the evidence that goes before court now will still be freely available to the court and the public, but will add to the quality of the judgment."
The changes come after the Government carried out a consultation exercise on the original plans, which were heavily criticised by civil rights campaigners, MPs and lawyers.
He added: "This was always consultation and I would have been accused of being rigid and deaf if I hadn't had come back and said, 'No you have got the wrong end of the stick - it is only where national security is at risk.'"
The way in which the intelligence and security services are overseen will also be overhauled under the new Bill, with Parliament electing which MPs and peers sit on the Intelligence and Security Committee.
At present its members are appointed by Prime Minister David Cameron .
Shami Chakrabarti, director of Liberty , said: "The oldest parliamentary trick is to start with a policy so outrageous that any crumb of comfort looks half-reasonable.
"The protection of inquests is that crumb, but what if grieving families and other victims want to sue the military, intelligence or political establishment for abuses of power?
"We've all seen fig leaves like 'judicial triggers' and 'exceptional circumstances' before."
Mr Clarke conceded that "some will be satisfied by my changes and some won't" but insisted the approach is workable.
"This is a way of hearing evidence which at the moment is never disclosed to the public at all, in any sensible country," he told Sky News.
"Nobody's spies give evidence in open court."