The back-down came after the planned fees were revealed in the media.
But council environmental health team leader Ros MacGill said the decision was made on Tuesday after finalising a report on fee changes with council development services manager Kevin Thompson.
They had agreed the $5000 in revenue that would be raised by imposing the fee "wasn't worth the hassle''.
The change could only be confirmed today because the report first had to be finalised then sent to councillors before its contents could be divulged.
The $16 fee was among several fee changes proposed by the council in an attempt to offset costs incurred by the council's environmental health team, which was policing a growing number of markets and food stalls.
Councillors raised concerns when the fee changes were discussed during last week's 2012-13 pre-draft annual and long-term plan meetings, and requested a report explaining the changes for next week's planning and environment committee meeting.
Other fees remain, including a proposal to lift the fee for commercial food stall operators from $16 to $30, and introduce a fee of $111 for every 10 stalls to cover the cost of inspecting "high risk'' markets, to be paid by event organisers.
Annual registration fees for markets would also increase by 2 per cent if the proposed changes were accepted.
