The UK prime minister Boris Johnson and chancellor will now self-isolate as normal after contact with Health Secretary Sajid Javid, who tested positive for coronavirus.
The reversal comes just hours after they said they would take part in a pilot scheme involving daily testing.
Opposition parties said it suggested there was “one rule for them and another for the rest of us”.
Downing Street said Boris Johnson will conduct meetings remotely at Chequers.
Chancellor Rishi Sunak said on Twitter: “Whilst the test and trace pilot is fairly restrictive, allowing only essential government business, I recognise that even the sense that the rules aren’t the same for everyone is wrong.”
Labour leader Sir Keir Starmer said the prime minister and chancellor had been “busted yet again for thinking the rules that we are all following don’t apply to them”.