The Payments Council has completed a u-turn by announcing that cheques will no longer be scrapped in 2018.
The body said that cheques will remain for as long as people need them.
A decision was taken last December to phase out cheques, with the target of October 2018 cited for the end of the payment method.
Figures showing that cheque usage has fallen by 40% over the last five years were highlighted.
However, the Payments Council said it would work to find alternatives to the cheque.
The decision prompted anger amongst consumer groups who said that cheques were still widely used, especially by the elderly, and that many small businesses utilised them.
And, after MPs invited new evidence, a decision has been taken to cancel the 2018 target.
"It's in the DNA of the Payments Council to consult and listen to all those people who actually make payments and use cheques," said Richard North, the chairman of the Payments Council.
"Listening to over 600 stakeholder groups, working with the banks and following our appearance before the Treasury Select Committee, we have concluded we should reassure customers that the cheque is staying."
Age UK welcomed the decision, but said there were many other issues with banking that affect people's every day lives, such as problems accessing cash.
"We are delighted that the Payments Council has listened to the many people who said how difficult the loss of cheques would be for them," said the charity.
"This is a vital first step that will help many older people."
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