A bill to phase-out greyhound racing by mid-2029 in Tasmania, introduced by the governing Liberals, was set to be debated in earnest by the upper house on Thursday.
The outcome is on a knife-edge, with the government needing the votes of four of the eight upper house independents to get it across the line.
Several independents had raised concerns about the phase-out plan, which was announced by the Liberals in August during minority government negotiations with the cross bench.
Independent Ruth Forrest said upper house members were greeted by a "piece of paper on their seats" on Thursday telling them debate had been taken off the schedule.
"To pull it because they fear it may not see favour shows this is entirely about politics," she said, adding the deferral was "disgraceful'.
Upper house Liberal Kerry Vincent confirmed the government had withdrawn the bill, noting members had spoken about having unanswered questions when debate began on Wednesday night.
Premier Jeremy Rockliff has been lashed by the greyhound industry for writing a letter of support to the sport prior to the July election, and then announcing the ban plan weeks later.
The delay means the bill isn't likely to be debated until mid-May or potentially August, Labor MP Luke Edmunds said.
"The community expectation is we would deal with this. There are people being left in limbo on both sides of this argument," Mr Edmunds, whose party will vote against the ban, told the house.
Several members supported suspension of the debate, with Greens' Cassy O'Connor saying it was needed so the government could provide more information.
"This is no trivial piece of legislation … therefore time should be put into answering questions," she said.
Prior to parliament beginning on Thursday, Liberal minister Bridget Archer said the government was committed to phasing out greyhound racing and would work with upper house members.
"The world is watching us," she told reporters.
On Wednesday night, independents Tania Rattray and Casey Hiscutt voiced their opposition to the legislation and Ms Forrest said she had yet to reach a position.
RSPCA Tasmania has supported the deferral, saying a "now or never" moment shouldn't be risked if MPs want more information.
The ACT is the only Australian jurisdiction to have banned greyhound racing.
Greyhound racers have described the government's proposed $4.8 million compensation package as inadequate and have accused Mr Rockliff of selling out.
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