Nicaragua's President Daniel Ortega has scrapped the changes to social security that have prompted violent protests across the country since Wednesday.
Speaking on national television, Mr Ortega renewed calls for the private sector to engage in talks.
But business leaders say they will only negotiate when the government stops "repression against the protests".
At least 25 people have been killed since pensioners and students first took to the streets.
More than 100 people have been injured. The dead include two protesters and a policeman who were killed in Managua on Friday, after demonstrations turned violent.
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Protesters accuse riot police and troops deployed across the country of carrying out most of the violence.
This is biggest challenge faced by Mr Ortega, the former Sandinista rebel leader in power since 2007.
"The previous resolution of April 16, 2018, which was the resolution that kicked off this whole situation, is being revoked, cancelled, put aside," he said.
The issue of social security reforms will be put to debate again once the situation in Nicaragua is normalised, Mr Ortega added.
The social security legislation was approved on Wednesday. It increased pension contributions for workers and employers and reduced overall benefits by 5%.
On Saturday, after four days of unrest, Mr Ortega addressed the nation for the fist time to call for negotiations.
He said he was willing to review the measure: "If in the talks we find a better way of carrying out these reforms, this decree can be amended or replaced by a new one."
He said the measures would not go into effect until 1 July, which gave the government and the private sector time to negotiate.
However, Nicaragua's powerful business association, Cosep, released a statement saying it would not join talks with the government until police violence ceases and freedom of speech is restored.
Less than 24 hours later, he addressed the Nicaraguan people again to announce the pension changes had been scrapped.
Mr Ortega has accused parts of the opposition of inciting violence and plotting to topple his left-wing government.
Several channels have been taken off the air for covering the story.
And in an incident that has been widely condemned, a journalist was shot dead while doing a live broadcast about anti-government protests.
Ángel Gahona was reporting on damage at a bank in the Caribbean coast town of Bluefields when a bullet hit him during his Facebook Live newscast.
Video footage shows him falling to the ground and bleeding.