Chinese internet surfers play online games at an internet cafe in Beijing on Feb. 15, 2006. PC makers were ordered in May to implement new software that blocks out violent and obscene material by July. China has since postponed that order. (Associated Press)

China's state media says the government has postponed a rule mandating all computers be sold with internet filtering software.

The order, which requires manufacturers to pre-install or supply the Green Dam Youth Escort software with PCs made for sale in China, was to take effect Wednesday.

The Xinhua news agency said in a brief report late Tuesday that the Ministry of Industry and Information Technology decided to delay the plan, though no new deadline or reason for the delay was given.

U.S trade officials, industry and free speech groups have all made direct appeals to China to scrap the order, citing security and privacy concerns.

"The Green Dam mandate raises significant questions of security, privacy, system reliability, the free flow of information and user choice," said a letter delivered to Chinese Premier Wen Jiabao from 22 chambers of commerce and trade groups representing the world's major technology suppliers.

U.S. trade officials in Washington said the order, which was abruptly introduced in May, might violate China's World Trade Organization free-trade obligations.

China already has the most extensive system for monitoring communications and blocking content on the internet, but Green Dam is its most intrusive tool yet, as it brings the censorship directly onto the individual's computer.

China said the system is needed to block access to violent and obscene material found online.

Yet independent researchers who have tested the software found it also blocks key words deemed politically sensitive in China, such as Falun Gong. Researchers at the University of Michigan who studied the program said it also makes computers more vulnerable to security risks.

A California company, Solid Oak Software, also claims parts of its software were used in Green Dam, raising the possibility of an intellectual property rights dispute.

With files from The Associated Press