Lord Mandelson has sidelined plans to extend maternity and paternity rights.
The proposals would have allowed fathers to take six months off and enabled both parents to share leave, but the recession appears to have temporarily put the brakes on them.
A spokesperson for Lord Mandelson’s Department for Business and Enterprise has admitted the cost of such regulations was the reason behind the decision.
He said: "We have not yet announced a date for extending maternity and paternity rights.
"We are continuing to review the appropriateness of all new regulations due to come into force in the current economic climate."
The representative added it was only right in the current circumstances to look at the "costs and benefits" of new regulations.
Under current laws, fathers can take either one or two weeks’ paternity leave, providing they meet certain conditions. Male parents cannot take odd days off and if they take two weeks leave they must both be taken together.