According to The Sun newspaper, which first reported on the story, a Number 10 source said the prime minister had “listened to the industry and heard them loud and clear”.
“Now is not the time to call last orders on takeaway pints and the boost to business that they bring,” they said.
The decision means pubs will no longer need to apply for permission from their local council if they want to continue selling takeaway alcohol.
The Home Office said councils, drinks retailers and residents’ groups had preferred a return to pre-COVID rules in justifying their initial decision.
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However, industry representatives said the decision would create more “unnecessary regulation” with no guarantee councils will approve applications for licence changes for individual premises.
The change has been welcomed by hospitality leaders.
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Martin McTague, national chair of the Federation of Small Businesses, told the BBC the move would provide pubs with an “extra revenue stream to mitigate the rising costs”.
The boost for business comes after Mr Sunak, who is teetotal, was heckled as he toured a London beer festival to mark alcohol duty reforms which he claimed are “backing British pubs”.
The new system means alcohol will be taxed on strength rather than the previous categories of wine, beer, spirits and ciders.