Chinese Communist Party-backed management and rebellious staff at an influential weekly newspaper in Guangzhou stepped back Wednesday from a contentious standoff over censorship that spilled over to the wider public and turned into an unexpected test of the new Chinese leadership's tolerance for political reform.

Hopes among supporters of the Southern Weekly that the dispute would strike a blow against censorship appeared to fizzle with a tentative resolution. Under an agreement reached Tuesday, editors and reporters at the newspaper will not be punished for protesting and stopping work in anger over a propaganda official's heavy-handed rewriting of a New Year's editorial last week, according to two members of the editorial staff. One, an editor, said propaganda officials will no longer directly censor content prior to publication, though other longstanding controls remain in place.

"If that's the case, we've got a small victory for the media," said David Bandurksi, an expert on Chinese media at Hong Kong University. The compromise, he said, might see censors back off the "really ham-fisted approach" they had taken in recent months.

The staff members who described the deal asked not to be identified because they feared retaliation after they and other employees were told not to speak to foreign media. Executives at the newspaper and its parent company, the state-owned Nanfang Media Group, declined comment on the agreement other than to say that staff were at work Wednesday and the Southern Weekly would publish as normal Thursday.

Early challenge for new leader

Aside from getting the presses rolling, the agreement appears likely to deflate the confrontation that presented a knotty challenge to Communist Party leader Xi Jinping two months after taking office. Xi has raised hopes of more liberal party rule, urging respect for the often-ignored constitution, and of a wider role for the media in helping Beijing press a renewed campaign against widespread corruption.

While the crisis began over the propaganda official's rewriting of the editorial calling for better constitutional governance to include praise for the party, it soon evolved into calls for free expression and political reform by intellectuals, university students and others. That challenged what the party considers its sacrosanct control over the media, raising the stakes for Xi's leadership.

"I don't know if what we do will make a difference, but we must do this," said Xu Lin, one of scores of supporters who gathered in protest for a third day outside the Southern Weekly's offices. "If we don't get our voices heard, we are trampled grass. We are humans, not grass."

Protesters swelled in numbers to nearly 100 by mid-afternoon, flanked by dozens of police, who separated them from about 20 left-wing Communist Party loyalists who waved national flags and portraits of revolutionary patriarch Mao Zedong. A freelance real estate agent, Xiao Yunhui, had newspaper taped to his body and the words "kidnapped" to show that the Southern Weekly "cannot speak in its own voice."

Overall, though, the numbers were smaller than the hundreds who showed up earlier this week outside the compound, which also houses parent company offices and lies off a busy street in Guangzhou, a prosperous, commercial city that has often been at the forefront of reforms.

The standoff echoed through the newsroom of the Beijing News, which is co-owned by Nanfang Media and has a reputation for aggressive reporting. Editors at the newspaper all week defied an order to run a commentary which many other newspapers carried that blamed resistance to censorship on meddling foreign forces. Then, according to accounts by reporters on microblogs, a propaganda official showed up Tuesday to insist.

At a tearful late-night meeting, staff voted to hold out, and publisher Dai Zigeng said he would resign, the accounts said. Still, a reporter and a phone operator at the Beijing News said Dai remained in his post Wednesday. The newspaper also carried the commentary, in an abbreviated version under a bland headline that left out criticisms of the Southern Weekly and its supporters.

In seeking to end the conflicts at both newspapers, officials appeared unbending on party control. At the Southern Weekly, Hu Chunhua, the newly installed party chief of Guangdong, the province where Guangzhou is located, personally intervened, according to the editorial staff member and an academic in Beijing, who asked not to be named because officials at his university ordered him not to speak with the media.

Press controls remain in place

The agreement to keep propaganda officials from censoring articles before they appear rolls back more intrusive controls put in place in recent months, but it does not mean an end to censorship. The Propaganda Department, which controls all media in China, chiefly relies on directives, self-censorship by editors and reporters and dismissal of those who do not comply to enforce the party line.

The Southern Weekly editor said it was hard to call the agreement a victory because controls still remain in place and punishments of staff, though forestalled for now, may be imposed later.

Management refused to yield to one demand from staff — that this week's editions include an explanation of the dispute, the editor and a colleague said. It's also unclear whether editor-in-chief Huang Can, who alienated staff by not resisting the provincial propaganda chief, Tuo Zhen, would be fired now or in the near future.

Censorship in Chinese media is often subtle, rather than overt, and frequently consists of bargaining between editors and their propaganda overseers. The Southern Weekly dispute was touched off after Tuo rewrote the editorial, which called for better constitutional government, to insert heavy praise for the party. The revised editorial was not submitted for review by editors before publication, violating an unwritten practice in censorship and enraging the staff, which saw it as an attack.