The National Union of Journalists condemned the practice earlier this month after news that a two-week work experience at Tatler magazine had fetched £4,000 at a recent Conservative party bash.
According to the Mail on Sunday, David Cameron will now ban the practice at future party fundraising events.
A senior Tory aide told the paper: "You can rest assured that this kind of auction will not be part of next year's event. It was badly misjudged."
It was not the first time that the party had auctioned off journalism placements to raise cash for the party - last year, a work experience placement at Conde Nast reportedly went for £3,700 at another Conservative party fundraiser.
NUJ deputy general secretary Michelle Stanistreet said: "Internships should be open to all, not the preserve of a wealthy few.
"The fact that they are being auctioned to raise funds for a political party is obscene. Such a disgusting practice simply perpetuates privilege and inequality."
The union has launched a campaign to attempt to force publishers to offer backdated payment for unpaid internships.
The initiative follows a judgment in 2009 in favour of an intern who worked for a London production company. The tribunal recognised that a worker is entitled to the national minimum wage - £232 for a 40-hour week - whether or not they have agreed to work for nothing.
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