Taoiseach Brian Cowen has revealed the means-testing proposal for medical cards for the elderly would not go ahead as revealed in last Tuesday's Budget.
Mr Cowen met officials from the Irish Medical Organisation (IMO) yesterday just hours after he confirmed the Government would press ahead with a scheme.
It is believed he will today try to restructure the payment scheme to doctors to make savings for the Exchequer.
A major trade mission touched down in China today without Mr Cowen. Education Minister Batt O'Keeffe led the delegation, while Cowen delayed his trip until tomorrow.
A Government spokesman said certain options will be explored within the means test framework previously set out.
The move was still condemned by Age Action - which said it was disturbed - and Opposition parties, who claimed Mr Cowen was only tinkering with income levels.
Age Action's Eamon Timmins said the move to scrap free healthcare will deprive many older people vital access to healthcare.
"The scheme has been a valuable tool in having people treated at community level, thereby keeping many older people out of acute hospitals and nursing homes," he said.
"It has also been valuable in enabling older people be discharged faster from acute hospital beds.
"It is not clear from any of the Government comments since Budget Day that the extent of the success of the scheme has been recognised."
The Taoiseach vowed to find a solution that will address the concerns of people and still respect the parameters of the Budget arithmetic.
"We've had an automatic entitlement which was introduced in 2001 which has escalated very, very considerably in terms of cost and we have to weigh up depleting resources, where you've got fewer resources coming in to the State in terms of exchequer returns, and you have to target those in areas of most need in relation to this scheme and that's what we're trying to do," he told RTÉ radio.
Around 140,000 pensioners will receive eligibility assessment forms or the full medical card in the coming months.
Public representatives across the country have been inundated with calls from concerned residents since the Budget reforms were revealed.
Some Fianna Fáil backbenchers, Government partners the Green Party and Independent TDs, opposition parties and social groups have all demanded a U-turn.
On Friday, Fianna Fáil Wicklow TD Joe Behan resigned from the party, while Independent TD Finian McGrath has threatened to withdraw his support for the Government if it continues with the plan.
Meanwhile, Fianna Fáil county councillors from around the country met in Co Galway to debate the Budget, and in particular the medical card issue.
Later this week, the Taoiseach will join delegates in China at the Seventh Asia - Europe (ASEM) Summit Meeting of Heads of State/Government to further develop bilateral relations between the countries.
Mr Cowen will also visit the Shanghai Association for Expo 2010 to review preparations for the event, meet members of the business and Irish communities in Shanghai, and attend a summit conference in Shanghai before returning home next Sunday.
"There are 100 companies going to China to show that Ireland is open for business, because that's how we survive, by our exports," he added.
"I'm grateful for the support and solidarity that has been shown."
The trade mission to China comprises two major sectors - education and financial services - and includes a number of university presidents and senior third level representatives.
The Education Minister said the trip was a crucial part of the Government's strategy in raising awareness of Ireland among key decision-makers in the Asian market where China is now among the world's fastest growing economies.
"Education is a key sector for the Irish economy, central to the promotion of Ireland overseas and a key component of the trade mission to China," said Mr O'Keeffe.
"Ireland has around 27,000 international students in higher education.
"The total impact on the Irish economy from international students in third level and the English language sector is estimated at between €830m and €1bn annually."
Mr O'Keeffe said that globally, international students are expected to triple in the next 10 years to around six million.
"Ireland, as an English-speaking country in Europe, has a strong competitive advantage in the international education market and it is vital that we develop key links with emerging education markets," he added.
"Developing education links with partners in Asia is an investment in our future economy."