Premier League clubs unanimously agreed on Wednesday to reject the radical "Project Big Picture" plan to restructure English football.
Under the controversial proposals, backed by Liverpool and Manchester United, the number of teams in the English top-flight would have been cut from 20 to 18 and the League Cup scrapped.
More power would have been handed to the biggest clubs in exchange for a hefty financial package and a greater share of broadcast revenues for the English Football League (EFL).
Although endorsed by the vast majority of EFL clubs, the plan drew criticism from the British government, the Football Association, the Premier League and fan groups.
"All 20 Premier League clubs today unanimously agreed that 'Project Big Picture' will not be endorsed or pursued by the Premier League, or the FA," the Premier League said in a statement.
The Premier League shareholders agreed to work on a strategic plan for English football to "ensure a vibrant, competitive and sustainable football pyramid" and announced a rescue package.
Project Big Picture, championed by EFL chairman Rick Parry, was seen as a power grab from the Premier League's "big six", also including Arsenal, Chelsea, Manchester City and Tottenham.
Those clubs and the three other longest-serving members of the top-tier -- Everton, Southampton and West Ham -- would have held the power to pass or block any major rule changes.
Speaking to Parliament's Digital, Culture, Media and Sport committee, Culture Secretary Dowden said the proposals "tended towards a closed shop" for the big six.
Dowden's comments come after Football Association chairman Greg Clarke said a breakaway from the Premier League was wielded "as a threat" during talks over the divisive plans.
In a letter to the FA council, which convenes on Thursday, Clarke said he had taken part in initial discussions before walking away when he felt the aim had become "the concentration of power and wealth in the hands of a few clubs, with a breakaway league mooted as a threat".
- Financial pressures -
Pressure has been applied to the Premier League from government to rescue lower league clubs, who face financial ruin without the return of supporters to stadiums.
A £50 million ($65 million) rescue package in the form of grants and interest-free loans for clubs in League One and League Two was agreed on Wednesday.
But no bailout has been agreed for the Championship, where unlike in League One and Two, clubs have yet to set a salary cap.
And the Premier League clubs took the opportunity to again make their case to government to ease the coronavirus ban on fans in stadiums.
Plans for a phased return of spectators in October were put on hold after the spike in Covid-19 infections that has led to local lockdowns across Britain.
"League One and League Two clubs rely more heavily on matchday revenue and have fewer resources at their disposal than Championship or Premier League clubs and are therefore more at risk, especially at a time when fans are excluded from attending matches," said the Premier League's statement.
"Football is not the same without attending fans and the football economy is unsustainable without them. The Premier League and all our clubs remain committed to the safe return of fans as soon as possible."