Tessa Jowell, the Culture Secretary, is to announce another U-turn on her plans to liberalise gambling, which have outraged church groups, Labour backbenchers and the voters of middle England.

Ms Jowell has already announced a cap of eight on the number of Las Vegas-style "super-casinos" to be permitted under her Gambling Bill after anti-gambling campaigners warned of a free-for-all that would create social problems.

Whitehall sources suggested today that she intends to put a similar limit on the number of small and medium-sized casinos, in order to prevent a rash of gambling venues springing up on high streets across the country, although the decision had not yet been approved by a Cabinet committee.

News of the possible move was welcomed by church groups, who said it could help keep casinos out of town centres, where they would present the greatest temptation to potential problem gamblers.

Ms Jowell is due to unveil the precise details of her proposals for the new regime for casinos before Christmas, at a hearing of the parliamentary standing committee scrutinising the Bill.

A spokesman for the Department of Culture, Media and Sport (DCMS) was unable to reveal the details of the proposals before the hearing.

But he confirmed that they would take account of concerns about the impact on the rest of the industry of the cap on regional "super-casinos", which will have a minimum floor area of 5,000 square metres and up to 1,250 slot machines

Following the announcement of the limit in November, campaigners voiced fears that it would simply lead to an explosion in numbers of smaller gambling houses.

The DCMS had originally envisaged that market forces would restrict the number of super-casinos to no more than 40, and that they would soak up the bulk of demand, leaving little space for smaller venues.

The cap on super-casinos will be maintained during the first years of the new legislation, while studies are carried out to see whether it has led to an increase in gambling addiction.

An expected amendment to the Bill will impose the same cap of eight "large" casinos - with a minimum 1,500 square metres and up to 150 slot machines - and eight "small" casinos - minimum floor-size 750 square metres, with a maximum of 80 slots.

No outlets smaller than 750 square metres will be permitted, as the Government wants to stop the proliferation of back-of-shop gambling dens.

The DCMS spokesman said: "We are going to announce the policy on casinos - how it will work and where the casinos will go - as soon as we can. It will be announced to the standing committee first.

"That policy will take into account the fact that by intervening in the market by limiting the number of regional casinos to eight, there will be knock-on effects throughout the market."

Jonathan Lomax of the Salvation Army said reports of possible restrictions on smaller casinos were a "very encouraging sign" that the Government was listening to concerns over gambling addiction.

"The Salvation Army would be very pleased if the Government capped the number of new small and large casinos to eight each," he said.

"The proliferation of these casinos on high streets across the country was a real concern, and the trial period, which should last at least five years, will enable research into the potentially severe social consequences of an increase in hard and addictive forms of gambling.

"The Government claimed this was a Bill about protecting vulnerable people, but the explosion in casino gambling it enabled was a direct contradiction of that aim. Each concession by the Government is a further signal that it recognises that any liberalisation of the gambling laws has to be done very slowly, and be monitored closely to ensure that people’s lives are not being ruined."

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