Best case.
The current government do a consultation and find that changes are deeply unpopular and they need the votes of women so decide to legislate that sex continues to exist as a separate entity.
This makes it more difficult for the next government to go near the same subject straight away in the event that Labour do win the next election.
The current government just kicking it into the long grass has the effect of making it more likely that we'll get crazier legislation under a Labour government which will only serve to create massive issues further down the line in terms of a backlash. Once the law is passed its exceptionally hard to role back on especially if it's with regards to rights. Once you establish a right, the act of trying to roll it back somehow, has the unwanted effect of also undermining other rights.
Going too far on trans rights, by restricting women's rights has that unintended consequence. Then trying to remove trans rights further undermines women's rights inadvertently. And workers rights and other minority rights.
Which is a far right wet dream. And possibly another reason you see MRAs going hand in hand with TRAs.
Thus the best case is actually to deal with this current wave as soon as possible.
Failing that, we want a kick into the long grass followed by a scandal on an epic scale to materialise in the US or Canada or elsewhere, which alerts the general public as to what a cluster fuck this is and Labour suddenly start getting cold feet themselves. That won't happen now without 'an event's due to how the Labour party is trying to control debate on the subject within the party through force.
Also a kick into the long grass position doesn't take into account what is happening NOW without any change in the law which is leading to trans lobby groups having such influence over state institutions with alarming effect. Possibly leading to the law being broken as a result.
The other thing that could happen on that front is a legal challenge which rules in favour of sex not being replaced by gender that then forces compliance by state institutions. That would require money and a suitable test case. The money is a problem and against the virulent culture of TRAs there is a shortage of people willing to go up against that type of abuse.