Environment secretary Owen Paterson conceded that there was little prospect of reversing the ban as ministers would most likely lose the vote in Parliament. Following this, party chairman Grant Shapps said there was no chance of winning a majority on the issue.
The debate came as thousands of people turned out on Boxing day to take part in legal hunts all over the country, including Scotland, where the hunting laws are slightly different and have caused somewhat less conflict.
The English and Welsh ban was brought in by Labour in 2004, but campaigners for hunting with dogs were confident the Tory-led coalition government would make good on its promise to seek repeal of the law.
Mr Shapps told BBC Radio 4's World at One: "It makes sense to bring something forward if you think there's chance of a parliamentary majority and at the moment there doesn't appear to be one."
Mr Paterson had told the Daily Telegraph: "There is only a point having a vote if you are going to win." He added that ministers still intended to hold a free vote on the issue at the appropriate moment and it was up to David Cameron to make the changes.