"We are not moving forward with the fund. Period," Acting Attorney General Todd Blanche said during testimony before the House Appropriations Committee.

It's an about-face for one of Trump's most divisive second-term initiatives, which had drawn criticism from Democrats, legal experts and even some members of Congress in the president's own Republican Party.

A federal judge had already temporarily blocked the White House from moving ahead with the "anti-weaponization fund" designed to compensate people who claimed to have been treated unfairly by the US government.

US District Judge Leonie Brinkema temporarily barred the administration last week from taking any further action to create or operate the fund while she considered imposing a longer-lasting pause.

The fund was created by the Justice Department as part of an extraordinary settlement of Trump's civil lawsuit against the Internal Revenue Service (IRS) over the leak of his tax returns by a former government contractor.

An addendum to the settlement bars the IRS from pursuing Trump, his family or companies for back tax claims, and Blanche, Trump's former personal attorney, said that remains in place.

"Nothing has changed with that," he said.

Under the terms of the settlement, the IRS is "forever barred" from pursuing any tax claims against Trump, his family or his businesses that were pending as of the May 18 settlement date.

Trump is the first US president in recent times to decline to publicly release his tax returns. He has claimed repeatedly that they are being audited by the IRS.

The Trump administration said the fund was intended to compensate people who suffered from government "weaponization" and "lawfare" – Trump's terms for what he says was politically motivated targeting of conservatives and his supporters.

But opponents said the fund had no clear legal basis, little public oversight and could be used to reward loyalists, including defendants convicted of crimes related to the Jan. 6, 2021, assault on the US Capitol by Trump supporters.

Trump, on his first day back in office last year, granted clemency to more than 1,500 people convicted over the Capitol assault, when his supporters attacked Congress in an effort to overturn Joe Biden's 2020 election victory.

The administration has also begun removing Justice Department press releases about January 6 prosecutions, calling them "partisan propaganda”.

But the fund had become politically toxic even among some Republicans.

Senate Republican leaders postponed a vote on a major bill funding Immigration and Customs Enforcement and the Border Patrol partly because of concerns that the fund could allow January 6 defendants to receive taxpayer money.

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