Education and Employment Secretary Gillian Shephard has told Glyn ADT Technology School in Ewell, Surrey, that it must remain a comprehensive because of public opposition to the proposal.
The school was one of two which caused uproar earlier this year with plans to select 40 per cent of pupils according to academic ability. The other was Rosebery School, an all-girls 11-18 comprehensive in Epsom.
But both sets of governors were fiercely opposed by parents, headteachers, councillors and education officials.
Surrey County Council, which is hung, with Conservatives holding the largest number of seats, said it was deeply opposed to selective education which had been abolished because of parental demand.
It said returning to selection would mean less choice for parents because the selective places would be taken up by pupils from outside the area.
Stuart Turner, head of Glyn ADT school, argued it was difficult to run a successful specialist school while having to select children at random.
Following the latest decision, Marie King-Hele, Liberal Democrat chair of Surrey's education committee, accused the governors of both schools of being out of touch with parents.
She has asked Rosebery School to abandon its plans in the light of Mrs Shephard's decision.
Ms King-Hele said: "I'm very pleased with the decision and I hope now we can settle down with the very good comprehensive schools we have here.
"The feeling among parents was very strongly against this. It's only a very small minority who want to return to selective education. I have asked the governors at Rosebery to withdraw their plan, to save a great deal of time and energy on something that is certain to fail."
* Moves by the country's top-performing comprehensive to introduce selection from September could also be in jeopardy. Education officials in Liverpool are seeking counsel's opinion on the possibility a judicial review of the proposal by the all-boys Blue Coat School.
They claim Government approval to introduce selection at the voluntary aided school would have serious equal opportunities implications, and could place the authority in breach of the Sex Discrimination Act.
A year ago, Blue Coat was reprimanded by the Department for Education and Employment over its admissions procedures and told to either stop choosing pupils through interview or to apply formally to become selective.
The move came in the wake of complaints that its ranking in exam league tables was unfair to other comprehensives because its admissions procedures amounted to covert selection.
Like the London Oratory, the Catholic grant-maintained school selected by Labour leader Tony Blair and his wife for their eldest son, the Blue Coat takes children living a long way from the school.
Boys are allocated places after being interviewed by the school and after recommendation by their primary head.
A local authority spokesman said: "Over a number of years this method of allocating places at the school, which is always heavily oversubscribed, has resulted in intakes that do not represent the full range of academic abilities, being weighted towards more academically able boys."
Labour faced embarrassment a year ago when it emerged that Peter Kilfoyle, a member of its education team, sent his son to the Blue Coat. He claimed to have rejected an alternative school for his elder son when it went grant-maintained.
Responsibility for establishing and implementing the admission policy at Blue Coat rests with the governors, as it is a voluntary-aided school. They now want it to become selective from September, offering 120 places per year to boys coming in the first 120 in an exam set and marked by the school.
Liverpool Council, which does not want a grammar school in the city, is seeking counsel's opinion.