Plans for social care reform will now include a cap on total contributions, the prime minister said after criticism of the policy mounted.
Speaking in Wrexham, Mrs May accused Labour leader Jeremy Corbyn of resorting to “fake claims, fear and scaremongering” over the impact of her plans.
She said: “This manifesto says that we will come forward with a consultation paper, a government green paper.
“And that consultation will include an absolute limit on the amount people have to pay for their care costs.”
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A YouGov poll for The Sunday Times put the Tories on 44 per cent and Labour on 35 per cent — the highest showing for Labour in the polls since the Brexit vote last year.
The Liberal Democrats said the policy could become Mrs May’s “poll tax”.
Party leader Tim Farron said the policy would see nine out of 10 English homes eligible to be put on the market to cover treatment costs.
“The dementia tax will be to Theresa May what the poll tax was to Margaret Thatcher. The moment she thought she was invulnerable she has chosen to do something so heartless I think it will bring her down.
“The dementia tax is going to become the big issue in the General Election now. Governments with big majorities make bad decisions, and this is an appallingly bad decision.”
Mr Corbyn, who welcomed the U-turn, also criticised the policy as only benefitting the very wealthy.
“Not satisfied with plunging our social care system into crisis, Theresa May’s nasty party has promised more attacks on older people,” he said at a rally.
“Theresa May and the Conservatives won’t stand up for pensioners, their only concern is their billionaire friends.”