David Cameron has ordered ministers to carry out the government's biggest U-turn since the general election by abandoning plans to change the ownership of 258,000 hectares of state-owned woodland.

　　Caroline Spelman, the environment secretary, will announce on Friday that a consultation on the sale of forests will be ended after a furious backlash that united Tory supporters with environmentalists and the Socialist Workers party.

　　"The consultation is going to be terminated," a government source has said. A No 10 insider added: "It's a cock-up. We just did not think."

　　The prime minister, who told MPs that he was not happy with the government's handling of the issue, has ordered Spelman to:

　　· End the consultation on plans to dispose of about half of the 258,000 hectares of woodland in England run by the Forestry Commission by 2020.

　　· Establish an independent panel with environmentalists to reach consensus on reforms to improve access and biodiversity in forests.

　　· Drop clauses in the public bodies bill that would allow the government to sell off all of England's forests. Under current laws only 15% of forests can be sold.

　　One government source said: "We have heard, we have listened. The consultation will be canned. The consultation will be terminated. It is now a case of coming up with something everyone is happy with."

　　The U-turn represents a victory for an unlikely coalition of disparate groups launched in October. The grassroots website 38 Degrees started a petition which, by last night, had attracted more than 531,000 signatures. One poll suggested 84% of the country opposed the sale.

　　Cameron indicated at prime minister's questions that he was backing away from the sell-off when Ed Miliband asked him if he was happy with his "flagship policy on forestry", which could have raised ￡350m.

　　"The short answer to that is – no," Cameron said to laughter, and shouts from Labour MPs of "timber". But he denied that the government was embarking on a U-turn. "It is a consultation that was put forward. We've had a range of interesting responses to this consultation. What is important is that we should be making sure that, whatever happens, we increase access to our forests, we increase biodiversity and we don't make the mistake that was made under the last government where they sold forests with no access rights at all," he said.