The hospitality and entertainment industries have been campaigning for looser restrictions and had been on tenterhooks over the possibility that revellers will have to produce Covid-19 immunisation cards before being allowed inside venues.
Nightclub operators have been critical of the proposals claiming the plans could cripple the industry and lead to venues facing discrimination cases.
Michael Ansell, of Wolverhampton rock nightspot Planet Nightclub, in Westbury Street, said: "I am pleased with that decision. It is totally the right thing to do.
"Taking the vaccine is a personal choice. It should be about people's freedom of choice and whether they want to have the jab or not.
"I think this passport idea is a bullying tactic to to try and get the younger people vaccinated.
"I've been doubled jabbed because I chose to do that. It's my personal choice, but other people have chosen not to. Some have said they had a bad reaction to the first dose and have refused to attend for the second, others have been getting their information from sceptics on the internet.
"That is their choice and risk to take. As a society we have a vote and the freedom to choose.
"People can weigh up the pros and cons for themselves."
Downing Street insisted the plan - which had been set to be introduced at the end of September - would be kept in reserve in case it is needed over autumn or winter.
Under the scheme clubbers would have been required to show proof - whether of double vaccination, a negative Covid test or finishing self-isolating after a positive PCR (chain reaction) test - in order to gain entry to clubs.
Secretary Sajid Javid has confirmed plans for passports for nightclubs and large scale events had been shelved, insisting the government shouldn't introduce measures "just for the sake of it".
Although Work and Pensions Secretary Therese Coffey said the idea had not been ruled out forever.
The Planet was closed for 17 months after the pandemic struck and was saved with the help of business grants and a online appeal which attracted more than £19,000 in donations, after Mr Ansell was left £200,000 in debt.