Coventry PCT told PMS practices last month that they would be switched to GMS contracts with no MPIG unless they agreed revised or revalued deals.
More than 90 per cent of GMS practices would earn less core pay under the new contract than they received under the old Red Book without MPIG top-ups.
A total of 31 out of 63 practices in the PCT are PMS, and some GPs were considering legal action to block the move.
However a joint statement from the PCT and Coventry LMC this week said: ‘Coventry PCT agreed to withdraw the notice of termination in order to commence negotiations to establish the framework for future PMS contracts.’
The statement said both sides would aim to complete negotiations by the end of the financial year, but admitted the timescale may be too tight.