The UK government was forced into a humiliating U-turn on Thursday as it scrapped controversial plans to privatise England’s public forests.

Environment Secretary Caroline Spelman told MPs: “I am sorry, we got this one wrong” as she abandoned plans to offload England’s public forest estate to companies, communities and charities.

The Commons was told she was halting the public consultation into the future of the 258,000-hectare estate, just 24 hours after David Cameron admitted he was unhappy with the plans at Prime Minister’s Question Time.

Downing Street insisted Mr Cameron had full confidence in Ms Spelman, and she had not offered to resign over the issue. She told MPs she and the Prime Minister had made the decision together to abandon the plans.

Ms Spelman said she took full responsibility for the situation over the proposals, which prompted an outcry when they were published at the end of January.

She said she was removing powers that would have allowed the measures to go ahead from the Public Bodies Bill currently going through Parliament, and setting up an independent expert panel to look into future forestry policy.

England’s public forest estate is currently managed by the Forestry Commission.

The plans included a £250 million sale of leaseholds for commercially valuable forests to timber companies, measures to allow communities, charities and even local authorities to buy or lease woods, and plans to transfer well-known “heritage” woods such as the New Forest into the hands of charities.

Critics argued the plans threatened public access to woodlands and their wildlife and would cost more money than would be saved.

Protests were held in well-loved forests around the country, and campaign group 38 Degrees started a Save Our Forests petition which attracted more than 532,000 signatures.

The group’s executive director David Babbs hailed the about-turn by the government as an achievement of “people power” – a sentiment echoed by TUC general secretary Brendan Barber.

But despite jubilation from campaigners, there were warnings that the fight to save England’s woods was not over.

Campaigners in the Forest of Dean said they would still be seeking cast-iron guarantees that their woods would remain publicly owned and managed and the Forestry Commission would be strengthened – not weakened by job losses – to continue its role of looking after the forest.

They said they would work to prevent the government from selling any public forest in the Forest of Dean, including woods previously under consideration for sale. The union Prospect said that even with the U-turn, England’s forests still faced real dangers, with the ability of the Forestry Commission to do its job properly compromised by more than 400 job losses announced earlier this month.

Shadow environment secretary Mary Creagh raised concerns about what would happen to the already-announced sale of 15 per cent of the forest estate, the most the government can sell under current legislation, which was put on hold last week pending a review of the criteria for selling them off.

The announcement of a new independent panel on forestry policy also provoked debate, with Green MP Caroline Lucas calling for it to include those who voiced their opposition to the forest sell-off and for it to be held in public.

Conservation groups such as the Woodland Trust, who the government had hoped would take on some of the heritage forests, warned there were bigger issues to be tackled in protecting England’s woods.

The Trust’s chief executive, Sue Holden, said the debate had put the spotlight on the plight of England’s forests but warned better protection was needed for ancient woodlands, which are already under threat from development due to weak protection and could be at even greater risk as a result of planning reforms.

The trust also wants to see ancient woodland which has been damaged by conifer plantations restored to its former glory – a move which Ms Holden described as “one of the most significant contributions you can make to nature conservation in the UK” – and a massive increase in the planting of new trees.