Liberal Democrat MPs will not oppose a Commons motion calling for Culture Secretary Jeremy Hunt to be investigated over alleged breaches of the ministerial code.
Deputy Prime Minister Nick Clegg instructed his MPs, including ministers, to abstain in the vote which will be forced by Labour tomorrow.
It signals Liberal Democrat distaste for the Culture Secretary's conduct over the BskyB bid, and means that a motion could be passed censuring Jeremy Hunt, a move which would be extremely embarrassing for the Conservatives.
A senior Liberal Democrat source said the decision not to refer Mr Hunt to the Prime Minister's adviser on ministerial interests was taken by David Cameron and was not endorsed by his coalition partners.
At a meeting of Lib Dem MPs Mr Clegg explained the position and there was "complete unanimity", the source said.
"The decision not to refer it to Sir Alex Allan was the Prime Minister's decision, and we respect that. The opposition's motion, whatever happens, is not going to change that.
"However, it is not a decision that is endorsed by the Liberal Democrats, therefore we don't think we need to endorse it, therefore we won't support it on the floor of the House."
Mr Clegg explained his decision in a meeting with Mr Cameron earlier.
"I don't think the Prime Minister was pleased about it," the source said.
But he said Mr Clegg had always been clear that if there were questions that remained after Mr Hunt's appearance at the Leveson Inquiry "there should be other ways of answering that".
"There clearly are still questions remaining," he said.
But the Liberal Democrats would not support Labour's "opportunistic" and "hypocritical" approach.
"Sometimes abstentions can be a significant and powerful parliamentary tool," the source said.