Plans to close three children's heart surgery units have been suspended by Health Secretary Jeremy Hunt after months of protest.
A £6m review had ruled that units at Leeds, Leicester and the Royal Brompton in west London should stop providing paediatric heart surgery.
But Mr Hunt told MPs that the consultation process was based on "flawed analysis" and revealed the closures would not go ahead.
He has asked NHS England to continue looking at reorganising the services, with a new report due at the end of July.
Professor Sir Bruce Keogh, medical director for NHS England, said: "We will institute a new process that recognises the very strong case for redesigning services to meet the demands of the future whilst addressing the legitimate concerns in our local communities."
Child heart surgery unit levels were due to be cut from 10 to seven as part of drive to concentrate expertise in more specialist centres.
But the original report outlining the plans, called the Safe and Sustainable Review, was heavily criticised and prompted a ferocious campaign against the closures.
After concerns about the review process, the matter was referred to the Independent Reconfiguration Panel (IRP).
Mr Hunt said the panel had "strongly" agreed with the need for change but questioned the findings of the original review.
It concluded it was based on a "flawed analysis of the impact of incomplete proposals and leaves too may questions about sustainability and implementation", he said.
"This is clearly a serious criticism of the safe and sustainable process. I therefore accept their recommendation that the proposals cannot go ahead in their current form and am suspending the review."
Before Mr Hunt's announcement, David Cameron insisted people could not expect technical surgery such as children's heart operations to happen at every hospital in the country.
"As the parent of a desperately ill child, wanting to get the best care for that child, you need to know that you're getting something that is world best. For really technical operations, you can't get that everywhere," he said.
"Clearly the conclusion is that this process, which started in 2008, hasn't been carried out properly so we need to make a restart."
Dr Jacqueline Cornish, national clinical director for children and young people at NHS England, said it would take the next few months to draw up new plans.
"We intend to announce a new way forward in the autumn, with plans for implementation within 12 months," she said.
Campaign group Save Our Surgery (SOS) said it was "pleased and relieved", adding that Mr Hunt's comments about the original process vindicated their actions.
Spokesman Sharon Cheng said: "The new review process must be fully open and accountable and ensure that there is a level playing field, with all units treated equally and standards of care for children the only consideration.
"The trauma experienced by patients and families across our region throughout the Safe and Sustainable process, as acknowledged by the Health Secretary, must never be repeated."