Justice secretary Ken Clarke makes U-turn on controversial abolition of youth offenders organisation before Lords vote

The justice secretary, Ken Clarke, has reprieved the Youth Justice Board of England and Wales (YJB) from abolition in advance of an expected House of Lords defeat over the move.

The YJB U-turn by Clarke follows hard on the heels of his decision to drop moves to axe the new post of chief coroner. Both moves had originally formed part of the coalition government's plans to cull the number of Whitehall quangos.

The Lords voted earlier this year to save the YJB ? a move which ministers later reversed in the Commons. But it appears Clarke has decided that was no longer possible as a fresh battle threatened to derail the progress of the Public Bodies Bill.

A Ministry of Justice spokesperson confirmed the YJB decision in advance of the Lords vote on the legislation: "Following careful consideration we have decided not to pursue the abolition of the YJB as part of the Public Bodies Bill.

"However, we still believe that youth justice system should be reformed to make it more efficient and directly accountable to ministers. Further details will be announced in due course."

The YJB was set up in 1998 by Jack Straw when he was home secretary to oversee what was then regarded as a "fractured and immature youth justice system''. The bulk of its annual ?404m is spent on providing custodial places for juvenile offenders.

The board's 300 staff also play a key role in the network of youth offending teams across England and Wales.

The original Clarke proposal was to move the YJB "in-house" as an internal division of the Ministry of Justice which raised fears that it would rapidly become absorbed into the culture of the national offender management service which is dominated by adult prisons. The YJB has long had a distinct objective of pursuing an approach more based on welfare and children's rights although it has been hit by two restraint-related deaths of young teenagers in custody.

Justice ministry sources indicated that ministers may yet introduce a closer relationship between the justice ministry and the reprieved YJB. They stress that the original abolition decision was based on a need to increase accountability rather than saving money or undermining the network of youth offending teams.

The former chief inspector of prisons, Lord Ramsbotham, and a crossbench peer whose amendment reprieving the board was accepted by the government, welcomed the decision, saying the body had proved its worth during the summer riots.

"During that period the Youth Justice Board played an enormously important part in liaising with, overseeing and helping both the youth offender teams out in the community and also the oversight of those being received in custody who required a great deal of help," he said.

The shadow justice secretary, Sadiq Khan, said Labour welcomed the "long overdue change of mind" that would allow the YJB to continue driving down youth crime.

"The YJB has been put under huge pressure this past year with the threat of abolition hanging over its head. It does an important job battling to reduce youth offending. It has a proven track record in reducing crime, which is why it was madness for the government to want to abolish it and why Labour and so many groups have campaigned for its survival with such determination."

However, Khan warned that its work was being undermined by cuts to youth offending teams.