Earlier this week health secretary Patricia Hewitt apologised for the problems caused by the online system. At the weekend the head of MMC, Professor Alan Crockard, resigned over the crisis.
An examination by the review group found problems relating to the selection process and has now suggested a number of solutions.
All applicants will be able to revise their choice of hospital and if they pick another they will be guaranteed an interview at that hospital.
Trainee doctors who are unsuccessful in the first round of recruitment will be able to apply during a second round. This round will be based on a revised shortlisting and interview process including a structured CV.
Health minister Lord Hunt said he appreciated it "has been a very difficult time for junior doctors".
"We all want a transparent and fair recruitment process that allows us to recruit and train the best doctors for the benefit of patient care," he added.
The British Medical Association (BMA) has welcomed the new proposals, calling them a "practical way forward".
Dr Jo Hilborne, chairman of the BMA's junior doctors committee (JDC), said: "We believe the latest offering from the review group…does not waste the hard work of thousands of applicants preparing for and attending interview. A robust second round of interviews is essential and we will continue to work for this.
"Junior doctors have endured weeks of turmoil. Their lives have been turned upside down by this shambolic and incompetent training application system. This debacle should never have happened and we urge the government to launch a fully independent inquiry into this sorry mess."
Dr Jonathan Fielden, chairman of the BMA's consultants committee, backed the call for an independent review and added: "Consultants have already put considerable effort into conducting interviews and while recognising that inevitably more work will be involved, we believe this is the most practical way to secure a fair outcome for junior doctors."
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