Attorney-General George Brandis is preparing to water down a controversial plan to scrap sections of the Racial Discrimination Act that restrict racist insults and hate speech after an avalanche of submissions flagged concerns over the changes.

And two Liberal MPs who had supported scrapping section 18C of the act have spoken out, admitting the government needs to rethink its proposed changes.

Several MPs confirmed that, as one put it, ''there hasn't been a word whispered about it'' in recent weeks, while several speculated the law changes could be ''parked'' for months to come and as the government grapples with a fierce budget backlash and a big drop in popular support.

Fairfax Media has learnt that Senator Brandis is working on a further winding back of the proposed law changes, amid a ferocious grassroots community campaign that Labor MPs have quickly tapped into.

The move comes after the Attorney-General was forced by the cabinet in March to soften his original plans amid a welter of protest from Coalition MPs in marginal electorates, some of whom represent large ethnic communities.