KUALA LUMPUR (Reuters) - Malaysia's government appeared on Friday to back off plans to censor the Internet after an outcry from opposition groups and complaints from the industry that it would hit investment.
On Thursday, details emerged of a tender issued by the country's information and communications ministry that sources who had seen the documents said was aimed implementing a filter later this year.
The news broke after police arrested 600 opposition supporters at a rally on Saturday and drew parallels with China's "Green Dam" project, prompting fears of a clampdown on this Southeast Asian country's vibrant online media which is frequently critical of the government.
"The government has no desire to implement Internet filtering," Prime Minister Najib Razak was quoted as saying by the Malaysian Insider, an influential news website.
Najib said the Internet restrictions were "not effective" and contradicted an earlier statement from Information Minister Rais Yatim who had said that there were plans in place to stop pornography from circulating on the Internet here.
Malaysia's government drew criticism from rights groups when news of the plan leaked and political analysts said it would have put at risk high-technology investment attracted by incentives and a promise made in the 1990s not to curb the Internet.
The National Front government that has ruled Malaysia for more than 50 years suffered its worst ever losses in national and state elections last year and put Najib in the top job to try to staunch losses that could see it losing power.
The government has suffered a string of by-election losses since the polls and Najib has unveiled reforms to win back investment as well as some populist measures.
"The government realised that this was a silly idea that would have had major repercussions on curtailing freedom of expression and investment," said political analyst Khoo Kay Peng.
Malaysia's move came after China delayed a project called "Green Dam", a filter to stamp out Internet pornography that drew criticism from the U.S. and the computer industry.
"Green Dam" critics say the software was technically flawed and could have been used to spy on Internet users and to block sites that Beijing considers politically undesirable.
Malaysia's "Multimedia Super Corridor" has attracted investors such as Microsoft Corp and Cisco Systems and pulls in investments worth 1.6 billion ringgit ($458 million) a year, according to industry data.
"If you block foreign Internet websites, search engines and social media like Facebook, revenues are going to fall and people will start switching out," a company official from a U.S. Internet portal operating in Malaysia told Reuters after news of the plan emerged.