In a televised address to the nation from Downing Street, the Prime Minister said that the roadmap easing earmarked for June 21 will be delayed for four weeks to July 19.
It means that limits on numbers for sports events, pubs and cinemas will remain in place, nightclubs will stay closed and people will be encouraged to keep up social distancing and working from home.
The move has been met with a mixed response from MPs across the region, and comes as health chiefs warned that rising cases of the Delta variant could see hospital admissions start to rise again.
John Spellar, the Labour MP for Warley, described said the extension was "absolutely absurd" and warned it would destroy businesses, while Dudley North Tory MP Marco Longhi urged people to make "one final push" to defeat the virus once and for all.
While the PM's announcement was generally met with a degree of resigned acceptance, a number of Conservative MPs have expressed frustration, prompting the possibility of a backbench rebellion when the delay goes before the Commons for a vote.
Businesses hit by the delay, including nightclubs and retailers, warned the move could be the final nail in the coffin.
Health minister Edward Argar said that delaying the June 21 lockdown for a month could result in the delivery of another 10 million second coronavirus vaccine doses across the UK.
He said that while the number of people in hospital has been "creeping up a bit", vaccination meant "we are seeing that severing of the link between the disease and hospitalisations and death."
Mr Argar added: "I think that on that basis, everyone will recognise that there comes a point where we do have to live with this disease and recognise that you cannot go for a zero Covid approach, you have to live with it, and vaccination is the key to that.
"So I think once we have got those second doses in people's arms, once we have got that level of protection up to around that 81 per cent, then I think people will be more comfortable with it."
Mr Spellar said there was no good reason for the delay and urged ministers to bring in vaccine passports so venues can reopen as soon as possible.
"It's absolutely absurd," he said. "The Government firmly promised the public we would get back to normal on the 21st. Many businesses have been holding on desperately hoping to get back to normal and this has dashed their hopes.
"Ministers are basically going for complete risk avoidance rather than risk management. They should urgently consider vaccine passports to enable people to get back to normal life.
"If every time we get a new variant the Government is going to shut down the country this will be going on for decades.
"Viruses mutate. Most cases are now in much younger people. Nearly all of those they told us were at risk have actually been vaccinated."
Mr Longhi said the delay was "yet another blow" for hospitality and that the key to our return to normality lay with a final vaccines push.
"It's obviously very disappointing, especially for hospitality," he said.
"A lot of hospitality businesses have been planning to open on the 21st and it means they have probably purchased stock.
"I have always said we need to be guided by what's right in terms of health. We are definitely seeing contagion going up. There are still too many people who haven't had both doses and they think these people could get quite sick.
"It's just one final push. You might not know that person but just pushing this forward a few more weeks you could be saving those lives. We have done it for so long let's just make that final push.
"Let's get on with it and vaccinate the rest of the population."
Stourbridge MP Suzanne Webb, said: "We need to come out of lockdown safely and the Prime Minister has made it clear all along that this would happen only if the data said it was safe to do so.
"That we have got this far on the road map is a great achievement. Our economy is back up and running and job vacancies are increasing as millions receive vaccine protection and life is nearly back to normal in many ways.
"However, it is the responsibility of the Government to get us out of all lockdown restrictions safely. If that means a delay to the final easing due to concerns about the Delta variant then it has my full support.
"The four weeks will also allow around ten million more people to receive their second vaccine.
"This is the most important weapon we have in this pandemic. Making time to better deploy it makes perfect sense to me."
Michael Fabricant, the Conservative MP for Lichfield, said: “This delay won’t be a popular decision, but when the various step dates were announced last year, the Indian variant was unknown.
"It would be utterly irresponsible of any Government to ignore this variant and changed infection rates.
"I hope that, provided no new unknown variant emerges, by the second half of July we will be back to normal though personally I am making no foreign holiday arrangements as quarantines from some countries will still be in place. I suggest others are cautious about overseas travel too.
“We are all going to have to live with Covid by keeping vaccinated, but I hope that in a year, we can look back at this dark period as a distant memory of things past.”
Wolverhampton South East MP Pat McFadden, the Shadow City Minister, said the announcement had been expected on the back of rising infection rates.
"It is no surprise that restrictions are being extended," he said.
"The vaccination programme has been very good in the UK but the extra few weeks give us more time to ensure a greater proportion of the population have two jabs.
"Of course, if India had been put on the red list earlier we might not be in this position.
"I believe the Government should have acted earlier given what we were seeing on our TV screens every night. The Government will have to account for its delay in that regard."
Professor Anthony Harnden, deputy chairman of the Joint Committee on Vaccination and Immunisation (JCVI), said that experts were "still very worried about the small numbers percentage wise, but probably large numbers of people that are still unvaccinated in the higher risk groups".
He added that the JCVI was "looking carefully at what the Scottish Government has done" with regards to urging over-40s to have their second dose at eight weeks, adding that "it seems to be a sensible strategy, and we will advise the Government accordingly".
His concerns are shared by Dr Lisa McNally, Sandwell's director of public health, who said the number of people in the region who had not yet been vaccinated was still too high.
"In Sandwell we have managed to hold off against the surges that have happened in other areas around the region, but we don't think that can possible last as the Delta variant becomes dominant," she said.
"What we are also seeing is a clear link in the data between vaccine uptake and infection rates, and those areas and communities where vaccination rates are lowest, have by far the highest infection rates.
"Those communities in particular are extremely vulnerable. So the decision to not be vaccinated as we go into this next month or so is a dangerous one.
"This variant is associated with high levels of hospitalisation as well as being very transmissible. We need to delay for as long as long as possible this surge in cases so we can get as many people vaccinated as we can.
"That means that we need vaccine supply as well as vaccine delivery."
Staffordshire County Council’s cabinet member for public health, Councillor Johnny McMahon, added: “It appears from early reports the Delta variant is having a more severe effect on people who have not yet had their vaccinations. So, we must be patent and make sure we do all we can to encourage people to get their first and second jabs without delay.”
The most recent data, for the seven days up to June 9, showed Birmingham's infection rate had gone up 63 per cent to 85.5 cases per 100,000 people. Walsall had the highest rate in the Black Country at 53.9, while the rate in Cannock Chase had almost trebled to 30.8.
Meanwhile, suggestions of a Tory backbench rebellion were gathering pace in Whitehall last night.
Mark Harper, the chairman of the Covid Recovery Group (CRG) of Conservative MPs, described the postponement as a "political choice", and warned that restrictions could carry on through the autumn and into the winter as other respiratory infections picked up.
"Variants and mutations will appear for the rest of time," he said. "We have to learn to live with it.
"If our very effective vaccines cannot deliver us freedom from restrictions, then nothing ever will."