The government has come out against a proposal calling for a nationwide vote on the deportation of foreign criminals.
Instead the cabinet aims to tighten residency permits for convicted foreigners sentenced to two years or more in prison.
The justice ministry said the rightwing Swiss People's Party proposal, which attracted more than 210,000 signatures, clashed with basic guarantees for the right to privacy.
The cabinet plan now goes to a three-month consultation procedure among political parties and interested organisations before the final draft is sent to parliament for discussion.
The People's Party on Wednesday accused the government of delaying tactics by presenting a tame counter-proposal.
The cabinet also launched a consultation procedure on Wednesday that aims to speed up the asylum process and make it more efficient.
Under a main element of the revision, refugees would no longer have the right to apply for asylum to Switzerland on the sole basis of being deserters or conscientious objectors.