Google, Inc executives in the U.S. have ordered a review of the search giant’s operations in China and are considering shutting its local site and offices there if talks with the Chinese government about having an unfiltered search engine within the law fall through.

The web company says a recent “highly sophisticated” attack on its corporate infrastructure combined with free speech limitations have led to the review.

Google held 26.6 percent of China's internet search market in the third quarter of 2009 compared with 63.9 percent for market leader Baidu, according to a report by Analysys International late last year 

“We have decided we are no longer willing to continue censoring our results on, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all,” said David Drummond, the company’s Chief Legal Officer and a senior vice president.

“We recognize that this may well mean having to shut down, and potentially our offices in China,” he said.

The company said today it uncovered an attack which resulted in the theft of intellectual property from Google. In addition the attack also affected at least twenty other large companies in a variety of fields, the company said.

Google says it has evidence to suggest that the attacks, though unsuccessful, had the primary of goal of accessing Gmail accounts of Chinese human rights activists. Account information and subject line, rather than the content of emails themselves were accessed, Google said.

The company also said accounts of dozens of U.S.-, China- and Europe-based Gmail users who are human rights advocates, appear to have been routinely accessed by third parties. The company said it was not a security breach but rather fishing scams or malware that facilitated the access.

The company said it had improved security as a result but urged users to be cautious when clicking on links appearing in emails, instant messages or when sharing passwords online.

“These attacks and the surveillance they have uncovered--combined with the attempts over the past year to further limit free speech on the web--have led us to conclude that we should review the feasibility of our business operations in China,” Drummond said.

He said the decision to make the review had been “incredibly hard” with potentially “far reaching consequences.”