China will delay a controversial plan to force manufacturers to bundle Internet filtering software with new personal computers sold in the country, in an abrupt retreat announced hours before the policy was due to start.

The climbdown was reported late Tuesday by the official Xinhua news agency, which said the Ministry of Industry and Information Technology would delay the mandatory installation of the controversial 'Green Dam-Youth Escort' filtering software on new computers.

The Green Dam plan, which officials said was to stamp out Internet pornography banned in China, was to start on Wednesday, but had been assailed by critics of censorship, industry groups and Washington officials as politically intrusive, technically ineffective and commercially unfair.

The announcement left open the possibility of the scheme returning. The ministry would also keep on soliciting opinions to perfect the pre-installation plan, Xinhua cited an official as saying.

But critics are likely to see the announcement, giving no fresh date for a launch, as a way for the government to escape quickly from the domestic and international controversy it attracted since the plan was revealed earlier this month, giving manufacturers little time to prepare.

I would say we would welcome this, said Susan Stevenson, a spokeswoman for the United States' embassy in Beijing.

DOOMED TO FAIL

Wang Junxiu, an Internet entrepreneur in Beijing who has objected to Green Dam and other forms of censorship, said the plan appeared to be poorly thought out and doomed to fail.

The leaders apparently decided the controversy and problems were too much and decided to make a break, said Wang.

If this had been a well-prepared plan with senior support, the result would have been very different. But it wasn't.

China said the Green Dam software was designed to block objectionable images, but the policy stoked opposition from industry and human rights groups and foreign governments who said it distorted fair market competition and strengthened Beijing's ability to censor political views.

Monday, the European Chamber of Commerce in Beijing urged China to reconsider the move, saying it poses significant questions in relation to security, privacy, system reliability, the free flow of information and user choice.

Last week, the United States also said the policy was draconian and the European Union urged it to be scrapped.

But the most potent opposition may have been the many Chinese Internet activists, bloggers and lawyers who threatened protests, law suits and other actions against the plan.

Susan Shirk, an expert on Chinese politics at the University of California, San Diego, said that earlier open criticism of Green Dam in the Chinese media suggested the plan did not have the backing of senior government leaders.

They do watch public opinion very carefully, Shirk said of China's Communist Party leaders. There's a very dynamic interaction between the Party authorities and the Internet public.

(Additional reporting by Kelvin Soh in Taipei, Editing by Alex Richardson)

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