The governments says it will prevent care home managers from making deprivation of liberty judgements under the reformed Mental Capacity Act currently being debated in parliament.
Concerns had been raised by the care sector itself that earlier proposals could have resulted in a conflict of interest among fee-receiving care providers.
A formal response was issued by the government on Tuesday, in which it confirmed it has listened to feedback raised.
The government is still struggling to settle upon a definition of deprivation of liberty to be included in the updated legislation, however.
The government is instead considering merely issuing “guidance" about what kinds of arrangements for enabling the care or treatment of a person should "fall within" codes of practice under the Mental Capacity Act.
The government also says the right to an independent advocate will not be automatic.
“This legislation is needed to protect the most vulnerable in our society," said Harriet Harman, Chair of the UK Parliament Human Rights Committee.
"We are talking here about important reforms to the law which could affect us, our loved ones and their future care."
"The protections for people who lack mental capacity must be both robust and proportionate: we need to ensure that people’s right not to be arbitrarily deprived of their liberty is fully protected."
"But any system must not be excessively bureaucratic not least because resources must not be diverted from vital care into unnecessary bureaucracy."
"We welcome where the Government has listened to the Committee and proposed some changes to the Bill. said Harriet Harman, Chair of the UK Parliament Human Rights Committee."
Elsewhere parents of children with learning disabilites are currently challenging the powers of the existing Mental Capacity Act at the High Court.
Parents Caroline Hopton, Rosa Monckton and Simon Mottram say they want to end rules under the Mental Capacity Act (MCA) that can see parents shut out of key decisions.