Licensing minister John Penrose has suggested the government could be considering a "more radical solution" around the licensing of live music in pubs.
The previous government launched a consultation on plans to offer exemptions to venues for gigs attracting 100 people or fewer. Some industry groups, including The Publican, are also pushing for a return to the two-in-a-bar rule.
But responding to a question in Parliament from Labour MP Kelvin Hopkins last week, Penrose agreed the problem is not the number of people playing, but the volume of the music.
"One of the crucial points that needs to be examined is whether there is a noise-nuisance solution as opposed to a solution to do with the number of performers, and that is one of the options that we will be looking at going forward," said Penrose.
Tory backbencher John Whittingdale, who is also chairman of the Culture Select Committee, asked Penrose whether he would go ahead immediately with plans for a capacity exemption.
But the minister said: "My concern is that my hon friend's proposal goes for a particular solution when there might be a broader and potentially more radical solution that should also be considered."
Penrose said earlier the government was "committed to moving as fast and as positively as we can towards better arrangements for the performance of live music in small venues".
He said he hoped to make an announcement "in due course".
In April, then shadow Culture Secretary Jeremy Hunt, who now occupies the post in government, said the Tories supported a 200 exemption for small venues.