80,000 people petitioned Hackney councillors to strike rough sleeping from a list of 'anti-social' activities in areas controlled by a new Public Space Protection Order (PSPO), which people could be billed a heft sum for breaching.
The PSPO was allegedly designed to tackle "the anti-social behaviour linked to street drinking, persistent rough sleeping and begging in 'hot spots'".
Under its rules, police and council officers could hand out fixed penalties to 'offenders'.
But bowing to public pressure, the Council announced on Friday it would remove the references to rough sleepers from its Order.
A spokesperson from local pressure group Reclaim Hackney told The Huffington Post UK: "We’re glad Hackney Council has seen the error of their ways in trying to apply this order to criminalise rough sleepers.
"But this isn’t good enough. People sleeping rough often have no choice but to beg and urinate in public places. The council have plenty of other powers to target anti-social behaviour.
"This order is designed to penalise vulnerable people and it must be scrapped in its entirety."
The u-turn came just one day after chart-topping singer Ellie Goulding lent her name to the movement for change, branding the Council "ignorant" in a Twitter tirade.
Cllr Sophie Linden, the cabinet member for crime, sustainability and customer services, told the Evening Standard: "The PSPO is not about ‘criminalising the homeless’.
"People who have found themselves being evicted, who have fallen on tough times and ended up sleeping rough are always helped. The Council has no intention of fining or taking action against these people."
"The rough sleeping provision in the PSPO is designed to tackle a handful of entrenched rough sleepers who have repeatedly and over a long period resisted all attempts to house them and help them, and who are causing serious problems for other residents with anti-social behaviour including drug use, drunkenness, public urination and defecation, and threatening behaviour."