Cllr Marc Jones, Plaid Cymru councillor for Whitegate, said:
"Wrexham Council had tried to limit free speech and political activity in Queens Square and Llwyn Isaf, both of which are owned by the council, under the guise of trying to prevent the likes of the English Defence League from mobilising there.
"But the ban would have also stopped legitimate political parties and campaign groups from being able to speak out on issues affecting Wrexham citizens. It was a blanket ban on free speech that met with total opposition from councillors."
A debate at the council's Corporate Affairs scrutiny committee was deferred last month due to questions about whether the council had the powers to impose such a ban on a part of the square that was a public highway.
The next meeting of the committee on June 1 will decide on whether to accept a revised protocol that accepts that there is no legal way to ban political campaigners from the square.
Cllr Jones said:
"I'm glad officers have accepted a common sense approach on this. The square has traditionally been used as a rallying point for demonstrations and for petitions. In the past few months Plaid has organised a petition against the downgrading of the Special Care Baby Unit as well as a mini-referendum on city status.
"Banning such basic democratic rights was completely out of order and I'm glad the new protocol accepts that."