Interior Minister Anupong Paojinda said his draft proposal to allow foreigners to own a small block of residential land was withdrawn from the cabinet agenda on Tuesday.
It was a sensitive issue and he was not sure it would return.
"We must take the matter back for review because it is sensitive. It must be reviewed to gauge the positive and negative effects on economy and society," Gen Anupong said before the cabinet meeting.
He did not know if the issue would be again placed before the cabinet after being reviewed.
Gen Anupong declined to say if its withdrawal was a result of opposition from society. He reiterated only that the matter was sensitive.
Deputy Prime Minister Wissanu Krea-ngam said the Interior Ministry wanted to reconsider the issue and gather public opinion over the next 15 days.
"After 15 days the draft rule can return to the cabinet, or not," he said.
The Interior Ministry's proposal would have allowed four categories of foreigners to buy up to one rai of land for residential purposes on condition that they invest at least 40 million baht in the country, he said.
The four categories were wealthy foreigners, foreign retirees, highly skilled foreigners and foreign investors, Mr Wissanu said.
He did not think it would have "sold off the country" as opponents claimed.
In practice, foreigners were already able to acquire land through long-term leases and could purchase up to 49% of all the units in a condominium building or through purchases by nominee companies, Mr Wissanu said.
Through such technicalities, foreigners' land acquisitions were already virtually unlimited, the deputy prime minister said.