"They were acting on the basis of a legal interpretation of what it means for a dog to be 'at large''.
"This week we sought an urgent legal review of that interpretation in response to the feedback we received from the public.
"The new legal opinion we have received leads us to believe that a court is unlikely to uphold a requirement for dogs classified as menacing to be muzzled inside their own home or property."
Rae apologised for "any confusion and upset that we have caused".
After the council's initial stance was revealed, Abbey van der Plas, who set up Christchurch Bull Dog Rescue, told NZME's Newstalk ZB she was "shocked, disgusted and sad" at the move.
"I cried, to be honest. This is heartbreaking," she said.
"The fact they need further legal advice shows how incompetent their legal team is in the first place.
"Anybody looking at this can see that it's breaching the Animal Welfare Act.
"Any animal needs to be able to display its natural behaviour. A dog cannot display its natural behaviour when it's muzzled 24/7."
Dogs get classified as menacing either because they are a specific breed or type, or because they have attacked or behaved aggressively.
Section 33E of the Dog Control Act states the owner of a menacing dog "must not allow the dog to be "at large", or in a public place, or in a private way without being muzzled.''
"We will be writing to the dog owners with dangerous or menacing dog classifications to update them. This will give clarity around where and when menacing dogs need to be muzzled," Rae said.
•People can find out more about the rules and responsibilities of owning a dog classified as menacing at: https://ccc.govt.nz/services/dogs-and-animals/animal-management/menacing-dogs