GOP leaders announced their decision after abruptly halting debate on the legislation and plunging into an intensive round of meetings with rebellious conservatives.
The decision created fresh turmoil as a divided government struggled to head off a default threatened after next Tuesday that would leave the Treasury without the funds needed to pay all its bills.
As the evening slipped by, the White House poked fun at Republicans led by Speaker John Boehner, who has become President Barack Obama's principal antagonist in a contentious era of divided government. And Senate Democrats pledged to scuttle the measure - if it ever got to them - to force a final compromise.
Boehner summoned a string of Republican critics of the bill to his office.
Asked what he and the speaker had talked about, Rep. Jeff Flake, R-Ariz., said, "I think that's rather obvious. ... There's negotiations going on."
There's less than five days left until the deadline that could trigger a federal default. But even if the Boehner's proposal passes Congress, it's likely to die on the president's desk. And that's only if he can get the support needed in his own party.
President Barack Obama wants the debt ceiling raised through spring 2013 to avoid a repeat of the bitter fight just before next year's elections.
Still, getting the newly modified House plan passed was seen as an important step toward the process of finding a compromise between the House and Senate proposals.
No Democrats were expected to support it. Boehner told the Republicans he expected to round up enough votes but was not there yet.
"But today is the day," he said, according to people in the room. That was before the vote was canceled Thursday night.
The non-partisan Congressional Budget Office says Senate Majority Leader Harry Reid's plan saves $500 billion less than proposed, while Boehner's plan falls short in savings by $350 billion.
As Congress continues to bicker, the economic uncertainty has gripped Wall Street. The Dow plummeted nearly 200 points on Wednesday and closed down for the fourth straight day.
The Associated Press contributed to this story.