Community legal centres are expressing relief that a planned $35 million cut in federal funding at the end of June will not go ahead.
Attorney-General George Brandis has instead announced a funding boost of around $55 million, overriding the cut and adding about $20 million over three years.
"This decision has been made to allocate new money, despite budgetary pressures, because of our acknowledgement of the central importance of what community legal centres do."
The previously planned cut was a result of old Labor Government funding expiring and further savings measures introduced by then prime minister Tony Abbott.
But centres warned the cuts would force them to drop vulnerable clients and sack lawyers.
The president of the Law Council of Australia, Fiona McLeod, says the reversal comes as a response to a vigorous community campaign.
"We're very delighted to see that the campaign to restore the funding to the community legal centres and the Aboriginal and Torres Strait Islander legal centres has been heeded and that the Government will be restoring funding."
Senator Brandis says the Government has announced the measures two weeks ahead of the May 9th Budget to give the sector more certainty.
"We're actually announcing this in advance of the Budget because we want to send a very clear signal about where the Government's priorities lie."
But while the overall reaction from the sector is one of relief, the timing of the announcement has drawn criticism.
Two legal centres told SBS News they had already sacked lawyers or reduced their hours.
Fiona McLeod says community legal centres had already weathered successive years of funding cuts and had been forced to react to the upcoming plans.
"Unfortunately, it's come at a stage where some of those legal centres had no certainty about their funding going forward, so some of them would already have been putting in place plans to lay people off and, in some cases -- for example, a number of legal centres in South Australia -- were looking at closing their doors if they didn't receive state funding to fill the gap. So this is late in the piece. It is very welcome, but it's certainly late in the piece in terms of their planning."
The Opposition has echoed that criticism, with Labor senator Katy Gallagher accusing George Brandis of creating havoc through uncertainty.
"Today, we see this humiliating backflip from him, and yet he still continues to deny any responsibility for the uncertainty and the devastating impact that these potential cuts have caused."
The legal centres say the new money is a good start now but more is needed.
They are urging the Government to implement a Productivity Commission report that recommended a boost of $200 million for the sector.
