Cambridge City and South Cambridgeshire PCTs announced last week that the plan to slash practice budgets was 'no longer being pursued'.
The combined PCTs proposed to reduce budgets for the most expensive practices to the average for the area.
Nine of the 15 most expensive practices per patient in the area are PMS, but the most expensive practice is GMS.
Dr Guy Watkins, chief executive of Cambridgeshire LMC, objected that the proposed cuts were 'unlawful and irrational'.
'We have received comments from practices and the LMC,' a spokesman for the PCTs confirmed. 'This is no longer being pursued by the PCTs in 2006/7.'
The PCTs are continuing with discussions over their plans to cut £732,000 from the primary care budget by abolishing some local enhanced services and reducing the payments to GPs for others.
Under the plans, the minor injury consultation rate would be cut by 50 per cent to £17.50 and rates for near-patient testing and anti-coagulation would drop by 30 per cent.
Cash for flexible careers and maternity cover would be cut to 'average historic' levels.
Dr Watkins said that the LMC was canvassing views on which enhanced services would go if the funding was cut.
He was 'sympathetic' to the PCTs' plight in facing a deficit of almost £28 million, but was concerned that their recovery plans appeared to derive from financial calculations.
'We are pleased that the PCT will give the board a financial risk assessment,' said Dr Watkins.