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The original decision was taken by Amber Rudd when she was home secretary.
Twenty-two people were killed and hundreds more injured in the bombings.
The Mother of one of those murdered said bereaved families " need answers" from the home secretary.
The Man , who cannot be named for legal reasons, had appealed against the original decision to remove his citizenship at the Special Immigration Appeals Commission (SIAC), but the case has not proceeded to a full hearing.
A SIAC document, provided to The Bbc , reveals Ms Patel instead " decided to withdraw the decision to deprive the appellant of his British citizenship".
No reasons have been publicly given.'Answers needed'
Families of the 22 people murdered in the bombing were not informed of the development.
SIAC is a semi-secret court and is The Venue of appeal for foreign nationals (or those deprived of British citizenship who are deemed also to have foreign nationality) who face detention, deportation or exclusion from the UK on grounds of National Security .
Many of The Court 's hearings and rulings are never made public, even to the appellants themselves, because they include sensitive evidence which the government says it cannot divulge.
Next week, evidence will be heard from MI5 before The Inquiry enters three weeks of secret hearings about what the security service knew in advance about the bomber. The Victims ' families are excluded from the hearings.