David Cameron has overruled the Home Office and ordered a rethink to ensure that pubs can be open for England's World Cup fixture against Italy.
The Prime Minister stepped in after pubs were refused permission to extend opening hours for the clash on June 14, which kicks off at 11pm.
A source said: "We'll now consult with the pub industry, police and councils on best way to make sure pubs can be open for the Italy game at 11pm."
The Home Office had refused a request from the British Beer and Pub Association asking for an extension of licensing times across the country.
In a message on Twitter, Mr Cameron said: "I have ordered a rethink on pub opening times for England's World Cup games - will consult with pub trade, police and councils."
The pub industry asked the Home Office to delay closing time from 11pm on June 14 to 1am on June 15 across the country to give fans time to watch the game.
But Home Office minister Norman Baker turned down the proposal, leaving pubs with the option of applying individually to local authorities for a licence extension - at a cost of £21 each.
The BBPA, which represents England's 49,400 pubs, believes the extended opening times could be worth an additional £20 million to the industry in drink and food sales.
Ministers have the power to relax the rules to mark an occasion of "exceptional international, national or local significance", as was done for the Royal Wedding and Diamond Jubilee.
England's remaining two group-stage games will be played at more convenient times for pubs, with the June 19 clash with Uruguay scheduled for 8pm UK time and the potentially decisive match against Costa Rica at 5pm on June 24.
If Roy Hodgson's team make it past the group stage, all the remaining fixtures they could be involved in will kick off at 9pm UK time, apart from the final, which will be played at 8pm on July 13 in Rio de Janeiro.
BBPA chief executive Brigid Simmonds said: "This would make for the most fantastic news for thousands of publicans and millions of football fans. I am delighted that the Prime Minister has intervened to back Britain's pubs and make clear that England's World Cup campaign is a time for celebration.
"This commonsense decision would remove a great deal of bureaucracy for pubs and local councils - and makes clear that the best place to enjoy the England team's journey is in your local pub.
"We are absolutely thrilled that our efforts have made a real difference for football fans and pubs."
Mr Cameron's official spokesman said that the Home Office will conduct a consultation with interested parties before a final decision on whether pubs can stay open late for the England match.
"The Government position is that we are consulting on nationally extending the opening hours as a result of the Prime Minister asking the department to look again at this issue," the spokesman told a Westminster media briefing.
"It is right that we consult but, subject to that consultation, clearly our intention would be that pubs would be able to be open for the relevant games, reflecting the fact that it is a major national event."
A Home Office spokeswoman said: "We will be launching a consultation shortly to determine whether pubs should be able to extend their licensing hours during the World Cup 2014 in Brazil.
"Given the time difference between the UK and Brazil and the fact some matches kick off at 11pm, the consultation will cover late-night matches occurring on the opening weekend, the closing weekend of the World Cup 2014 and for England's 11pm matches.
"We will examine the responses to the consultation thoroughly and carefully before deciding how to proceed thereafter."