The LibDem Deputy Prime Minister's announcement throws a lifeline to a number of high-profile politicians north of the Border who had been expected to have to fight for newly created seats.
It also marks a significant blow to the Conservatives' chances of winning an outright majority at the 2015 General Election.
They will now not pick up the extra 20 safe seats throughout the UK that a radical shake-up of constituency boundaries had been expected to secure.
The LibDem leader said his his party would no longer support the changes following what he said was a Conservative "breach of contract" over plans to reform the House of Lords.
The Lords proposals are now also effectively dead after David Cameron failed to win over backbench sceptics who have argued the policy is not a priority when the UK is in recession.
Mr Clegg argued it would be wrong to disturb the balance of democracy in the Commons without increasing democracy in the Lords.
Ditching the reforms will help most Scottish politicians.
The radical plans would have resulted in Scotland losing seven MPs at the next General Election, expected to be held in 2015.
The changes were designed to cut the number of overall MPs from 650 to 600.
At the same time, ministers wanted to equalise the number of voters in constituencies, arguing that votes cast across the country should carry the same weight.
The plans involved the full- scale redrawing of almost every single Westminster constituency in the UK.
Among the unintended consequences were expected to be pitched battles between party colleagues for the newly created or altered seats.
These included LibDem Chief Secretary to the Treasury Danny Alexander and former leader Charles Kennedy.
Initial proposals from the Boundary Commission for Scotland effectively suggested that Mr Kennedy's Ross, Skye and Lochaber constituency could be axed and a new seat created called Inverness and Skye. This new seat, however, would have contained much of the area currently represented by Mr Alexander.
The effective scrapping of the plans will also be good news for Labour, who faced a squeeze on seats throughout Scotland, including Glasgow.
While the Conservatives UK-wide would have gained from the changes, Scotland's only Tory MP David Mundell had also complained that the proposed changes to his constituency were a matter of regret.
The SNP's six MPs were expected to be largely unaffected by the changes.
Earlier this year politicians from all parties lined up to criticise plans for the shake-up, with submissions to the Boundary Commission for Scotland website showed widespread discontent with proposed changes to almost every constituency in Scotland.
Labour has always opposed the plans, insisting the Tories only backed them for their own political advantage.
Last night, the party's Shadow Justice Secretary, Sadiq Khan, said: "Nick Clegg suddenly finds it impossible to support the reduction in the number of MPs and the parliamentary boundary changes. But, if it is such a wrong policy, he should have opposed it in the first place, just as Labour did.
"It was left to Labour to fight the arbitrary reduction in the number of MPs.
"Getting rid of 50 MPs hits Labour the most. That's why the Tory-led Government chose that figure. It was nothing to do with better politics, or saving money – particularly as this Government has created an extra 117 unelected peers since May 2010."