The Chinese government is retreating from a controversial requirement that every PC sold in the country be equipped with Internet filtering software.

On the eve of a July 1 deadline for compliance, the country's Ministry of Industry and Information Technology (MIIT) today delayed implementation indefinitely to give computer-makers more time to comply, the Xinhua News Agency reports.

Computer makers had protested that installing the software, called Green Dam Youth-Escort, might expose them to liability if the Chinese government uses the software to invade its citizens' privacy. The U.S. government sent a letter to Chinese officials complaining that computer makers were given virtually no notice of the mandate ahead of time, possibly violating World Trade Organization (WTO) rules. Others complained the software could be used by the Chinese government to censor political material—not just pornography.

Early this month, MIIT decreed that all new computers sold in the country come with Web-filtering software either installed on the hard drive or packaged as a separate compact disk. The MIIT claimed to have initiated the policy "in response to calls from many schools and parents" to block objectionable material and spent about $6 million to purchase licenses for Green Dam software, which would be free to PC buyers, according to Xinhua.

Green Dam has been criticized as insecure, flawed and intrusive. Xinhua reports that when users tested Green Dam's capabilities using cartoon characters, the software deemed the blue-furred Japanese cat Doraemon to be "safe" while the pudgy, lasagna-eating American cat Garfield was at times filtered because Green Dam considers an image with a large area of yellow to be pornographic.