Staff will no longer be told to go back to their workplace to save the economy, in another government U-turn as coronavirus infections surge again.
Last month, workers were urged to stop working from home if they could – even amid suggestions they could be at risk of being sacked if they refused.
But Michael Gove said there would now be “shift of emphasis”, also revealing the target for 80 per cent of civil servants to be in the office had been ditched.
“If it is possible for people to work from home, then we would encourage them to do so,” the cabinet office minister said.
Mr Gove said ministers now believed they needed to “balance” the need for schools to remain open with curtailing other activity to “try to reduce the virus”.
That was why “if we can limit or appropriately restrain social contact, that is what we're trying to do”, he told Sky News.
On BBC Breakfast, Mr Gove was accused of a “complete about turn”, but replied: “No, it is a response to the spread of the virus. A stitch in time saves nine.”
He also confirmed that planned trials to allow the phased return of limited crowds to sporting events from next month had been scrapped.
Only three weeks ago, Boris Johnson was preparing to launch a major drive to persuade more staff to return to their workplaces, to save struggling retailers in town and city centres.
The campaign – which was never really launched – came amid pressure from Tory MPs who were warning of “devastating consequences” for businesses in urban areas.
Employers were being asked to reassure their workers that it was safe to return, by highlighting measures taken to prevent the spread of Covid-19.
But, underlining the rethink, Mr Gove added: “One of the things that we recognise is that, in the circumstances, if we can help people to work from home we will.”
He said he could not “predict with absolute certainty” whether the new restrictions being announced today would be lifted in time for Christmas.
The new shutdown will begin, in England, with pubs, bars and restaurants ordered to close by 10pm from Thursday and required to offer table service only.
Police will be able to issue £1,000 fines and make arrests to enforce two-metre social distancing, as Covid-19 cases double each week across the UK.
The prime minister will announce further measures in a lunchtime statement to the Commons, expected to include a tightening of the ‘rule of 6’ limit on socialising.
The UK's Covid-19 alert level was raised to four on Monday, meaning the virus is "high or rising exponentially" – and making a crackdown inevitable.
However, Conservative MPs are demanding proper scrutiny by MPs, instead of measures being fast–tracked by ministers under emergency legislation passed in March.