China is to delay the launch of a controversial policy to force manufacturers to install mandatory filtering software on new computers.

The Ministry of Industry and Information Technology's climbdown on the compulsory installation of the 'Green Dam Youth Escort' filter comes just a day before the order was due to come into effect.

The state news agency Xinhua, which revealed the decision, did not say why the implementation of the policy had been postponed.

China said the Green Dam software was designed to block material such as pornography or violent images, but the policy aroused opposition among industry groups, human rights organisations and foreign governments due to fears that it could strengthen Beijing's efforts to censor politically sensitive information.

On Monday, the European Chamber of Commerce 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'.

At a meeting of the World Trade Organisation last week, the US also declared the policy 'draconian' and the EU urged it to be scrapped.