The 50p coins minted to commemorate Brexit on 31 October are to be “recycled”, the Treasury has confirmed.

The decision comes after ministers agreed last week to “pause” production of the special-edition coin by the Royal Mint because of concerns that plans to leave the EU at the end of the month were unlikely to be fulfilled.

It is understood that thousands of coins with Thursday’s date on them will be melted down and the metal kept aside until the next Brexit date is agreed.

A Treasury spokesman said: “We will still produce a coin to mark our departure from the EU.”

The coins were supposed to mark Britain’s departure at the end of the month but the Treasury told the Royal Mint to begin stockpiling last week.

Officials waited before making a final decision about the coins until the EU heads of state agreed an extension to the Brexit deadline and it was clear that parliament would prevent the UK from crashing out without a deal on 31 October.

Once an extension was agreed on Monday and No 10 had made it clear its preference was to have a general election, officials were given the all clear to prepare for a future Brexit date.

About 3m coins were due to be ready to go into circulation under plans put in place by the chancellor, Sajid Javid. The coins bore the inscription “Peace, prosperity and friendship with all nations”, above the leave date: 31 October 2019.

The cost of designing and producing commemorative coins was met by the Mint out of its own revenues, the Treasury said, and the costs of recycling would also be met by the Mint.

There was speculation that the thousands of coins minted so far could fetch a premium on the 50p cover price, possibly selling for as much as £800 each.

However, Brexit coins bearing the October date “will now be recycled”, the Treasury said.

Javid’s predecessor, Philip Hammond, had planned a limited edition of about 10,000 commemorative coins to be sold to collectors for £10 each in time for the first deadline on 29 March.