However, the compromise adopted by the ACT Government will allow same-sex couples to register their relationship and have a ceremony paid for by taxpayers but carrying no legal recognition.

The ceremonies will be conducted by the Registrar's office and cannot be vetoed by the Federal Government because they will not be written into legislation.

Faced with implacable opposition from the Rudd Government over formal ceremonies, Mr Corbell lashed out at what he called "fear and bigotry" influencing the outcome.

"We are angry, disappointed and frustrated with the approach of our federal colleagues," he said.

"We think it is appalling, unacceptable and completely at odds with the territory's status to make these laws for itself.

"It is a hypocritical position, it is a contradictory position and it is not a position that consistently adopts the principle of equality which they claim to profess in other areas of law reform," he said.

Mr Corbell accused Prime Minister Kevin Rudd of being unduly influenced by the Christian lobby on this issue.

"There is no doubt there is an element of either fear or bigotry at play around this whole debate," he said.

The decision by the ACT to water down its proposal, and adopt civil partnerships without legally recognised ceremonies, brings the territory into line with Tasmania and Victoria.

Federal Attorney-General Robert McClelland repeated yesterday that the ACT's original proposal mimicked marriage.

Mr Corbell again rejected this assertion and said the first informal ceremonies between same-sex couples should occur later this month.

Last December, Mr Rudd gave the all clear for the ACT to have the first gay unions in Australia, saying the Stanhope Government was elected to govern on such issues and was accountable to its constituents.

Later, however, he directed Mr McClelland to threaten to override the ACT legislation, as the Coalition government did the last time it was put forward.

During the row over that intervention by then prime minister John Howard, senior Labor figures spoke passionately in defence of the ACT's right to legislate for same-sex couples.

Frontbencher Penny Wong, now a minister, said then the Howard government was using the issue as a political football to exploit prejudices in sections of the community.

ACT Labor Senator Kate Lundy, who also spoke out against Mr Howard's actions then, yesterday welcomed the compromise.

Heidi Yates from ACT gay lobby group Good Process said she was disappointed.

"Our consultation made it very clear that the community would prefer the legislation include a formal ceremony and that that was important to couples both personally and more broadly in tackling discrimination against same-sex couples," she said.

Gabrielle Hitch from the Canberra-based Campaigns for Civil Unions said forcing the ACT to back down was appalling.

"It is unjust and against everything Mr Rudd said in the lead up to the election," she said.

Mr McClelland welcomed the ACT's backdown.

"Consistent with federal Labor's national platform, the [Rudd] Government made clear to the ACT that it would not accept legislation that mimics marriage," he said.

Australian Christian Lobby spokesman Jim Wallace commended Mr Rudd for intervening against the Stanhope Government.