Council plans to increase allotment rent charges by a whopping 180% to plug a £100,000 budget black hole are due to be scrapped.
Councillors previously voted in favour of raising charges from 15p to 42p per square metre.
But following widespread opposition by town allotment-holders, council chiefs unveiled a new package of financial measures.
Councillors instead backed an increase of just 1p per square metre from April next year, and for future rent rises to be in line with inflation.
Contributions of £50,000 a year from the council’s public health department has been secured for the next three years.
Any shortfall will be found from other areas of the council budget.
A spokesman for Hartlepool’s Throston allotment site said: “It is good news. I don’t think anybody can complain at that.
“The opposition by holders has had a great effect. I think it’s rightly so; why penalise people with allotments?”
The council says it will also work with allotment holders to save money on repairs and improvements.
Councillor Marjorie James, chair of the council’s Neighbourhood Services Committee, said in a statement: “Allotment holders have a tremendous amount of passion and the benefits that allotments bring to the people of our town should never be under-estimated.
“I think we have arrived at a good solution and I appreciate the contribution from Public Health but it is only short-term fix until 2020.
“It does however provide us with more time to work together with allotment holders to find ways of reducing our costs in the longer term and making the service self-funding given the ongoing financial pressures being imposed on the council.”
Coun Christopher Akers-Belcher, chair of the finance committee, warned the council still faced “really tough choices” to save £20m over the next three years following Government cuts.
He said: “Clearly, there are many health benefits which derive from people having allotments and I think the package of proposals agreed today is a sensible way forward and one which I sincerely hope will be welcomed by allotment holders.
“It is the responsibility of us to always listen to residents and meet their needs wherever possible.”
The measures will go before full council as part of the overall budget on Thursday, February 23.