Ministers said they have no further plans to cut welfare as they sought to heal a rift over last week’s Budget.
Welfare Secretary Stephen Crabb made the pledge in his first speech since replacing Iain Duncan Smith, who resigned with an attack on planned disability benefit cuts.
And the PM defended Chancellor George Osborne, whose Budget is missing £4.4bn earmarked for the now-scrapped cuts.
Labour said Mr Osborne should resign and the Budget should be withdrawn.
Both David Cameron and Mr Crabb praised Mr Duncan Smith, who said the government risked dividing society with politically-motivated spending cuts.
The new work and pensions secretary confirmed the changes to Personal Independence Payments had been cancelled and told MPs: “After discussing this issue over the weekend with the prime minister and the chancellor we have no further plans to make welfare savings beyond the very substantial savings legislated for by Parliament two weeks ago.”
He also said the government welfare cap, branded “arbitrary” by Mr Duncan Smith, had “strengthened accountability” and its level would be reviewed in the Autumn Statement later this year.
The Conservative leadership has been under fire – including from some of its own backbenchers – over the cuts to disability payments, which came at the same time as tax cuts for higher earners.
Iain Duncan Smith said this flew in the face of Mr Cameron and Mr Osborne’s oft-repeated claim that “we are all in this together”.
Mr Cameron addressed Mr Duncan Smith’s attack during a statement about the European Council.
He stressed to MPs that the Conservatives remained “modern, compassionate, one nation” party under his leadership.
He listed policies aimed at low-earners including the National Living Wage and rebuilding “sink estates”, adding: “None of this would be possible if it wasn’t for the actions of this government and the work of the chancellor in turning our economy around.”
The changes to Personal Independence Payments which prompted his resignation have now been shelved, and ministers plan to say how the planned £4bn savings will be found at the Autumn Statement later in the year.
Responding to Mr Cameron’s statement, Labour leader Jeremy Corbyn criticised Mr Osborne’s absence from the Commons chamber and said the U-turn on disability benefits had created an “enormous hole” in the Budget, adding that the package had “inequality at its core”.
He did not mention Mr Duncan Smith’s resignation or his parting shot at the government.