The US Justice Department has dropped its plan to create a $1.8 billion compensation programme.
"We are not moving forward with the fund," Acting Attorney General Todd Blanche said during testimony before a House committee on Tuesday.
The official confirmation came as the top Republican in the US Senate said he understood that President Donald Trump's "anti-weaponisation fund" is no longer going ahead.
Senator John Thune told reporters on Tuesday he had discussed the fund with acting Attorney General Todd Blanche and confirmed that it was "correct" that, in his understanding, the initiative was now off the table.
A federal judge had already temporarily blocked the White House from moving ahead with a $1.8 billion package.
US District Judge Leonie Brinkema barred the administration from taking any further action to create or operate the fund while she considers whether to impose a longer-lasting pause.
The fund was created by the Justice Department as part of an extraordinary settlement of Trump's civil lawsuit against the Internal Revenue Service over the leak of his tax returns by a former government contractor.
The administration said the programme was intended to compensate people who suffered from government "weaponisation" and "lawfare" — Trump's terms for what he says was the politically motivated targeting of conservatives and his supporters.
But opponents said the fund had no clear legal basis, little public oversight and could be used to reward loyalists.
