The Liberal government has backed away from plans to turf a branch of the Royal Canadian Legion from its home in a government building near the B.C. legislature.

Citizen's Services Minister Ben Stewart said Thursday the legion and the vets who frequent it will be staying in their heritage house headquarters after originally saying they won't escape the government's budget tightening.

Former B.C. premier Duff Pattullo granted the members of Legion branch 127 the use of the building in 1934 as a headquarters for civil service workers who served overseas.

The current age of the Legion's 115 members ranges from the mid to late 80s.

Earlier, the branch received a letter from the Stewart's ministry advising the veterans to come up with $26,000 in annual rent or leave by this summer.

Stewart had maintained the legion was on the government's cost-cutting hit list and said he was preparing to meet with officials.

But an uproar in the legislature and protests from the veterans prompted the Liberal minister to do an about-face, and after several media scrums Thursday, he said they will be able to stay put.

"I apologize for the distress that that's caused the veterans, but the reality is I still plan on meeting with the president and making certain we're completely clear so that we move ahead," said Stewart.

He said the Legion members will remain at their headquarters and will not be asked to leave or come up with $26,000 in rent.

The Opposition New Democrats said the demand for rent or leave was an insult to the Legion members, some of whom were front-line fighters during the Second World War and prisoners of war in Asia.

"Eighty-seven years old and they're still fighting for their rights, it's outrageous," said New Democrat John Horgan.