The Government has abandoned its Supreme Court case regarding fixed fees for legal aid lawyers.
The Criminal Bar Association has been fighting the new regime under which defence lawyers receive a set fee based on the seriousness of their client's charges, rather than being paid for the amount of work they do on the case.
In May this year, the Court of Appeal found the implementation of fixed fees to be unlawful as well as unreasonably restrictive on Legal Services Commissioner Nigel Fyfe, who grants legal aid.
The Government went to the Supreme Court to try to overturn the ruling. However, it has dropped the case and will instead usher in new rules giving Mr Fyfe greater scope to decide on payouts for some cases.
Justice Minister Judith Collins said on Friday it was not a big call to abandon the legal challenge.
"The Crown has withdrawn its application and the Commissioner for Legal Services has made interim changes to clarify when and for what reasons legal aid payments to criminal defence lawyers can be amended. So in other words, some variance is available."
Ms Collins said she hoped that legal aid lawyers respond positively to the changes.
Criminal Bar Association president Tony Bouchier said lawyers defending accused murderers and rapists could be in line for more legal aid funding under the changes announced.
"My reading of it is at the high-end cases that they will cut a little bit more slack than they have in the past and look at providing more funding to the high-end cases where they're warranted.
"But we don't really know what that means until our membership starts making claims for extra preparation time."