The Hong Kong government has withdrawn a controversial anti-subversion bill that sparked the territory's biggest political crisis in recent years.
Protesters said the propsed law would have curbed their freedoms
Chief Executive Tung Chee-hwa said the government would not introduce a new version of the legislation until more public consultations had been held.
He said the government had no timetable for introducing the new version, nor did he spell out which aspects of the old bill would be reviewed.
Mr Tung's decision, which is certain to have been approved by his backers in Beijing, follows a split in his governing coalition which would have made it impossible to pass the bill as it stood.
Support for the bill among Hong Kong politicians was seriously eroded in July when around 500,000 people took to the streets, in protests which also alarmed China's leaders.
Hong Kong is required to outlaw sedition, treason and subversion under the mini-constitution negotiated for the territory when China resumed sovereignty over the former British colony in 1997.
But critics of the bill said it would erode political and religious freedoms.
"I have seen there are still some concerns expressed in the community about Article 23," said Mr Tung. "For that reason we need to re-examine the whole issue".
ARTICLE 23 BILL
Outlaws: Reporting state "secrets"
Criticism of Beijing authority
Access to "subversive" material
Threatens currently legal groups, such as Falun Gong
He told a press conference that they would not continue with the legislation until it had more support. "We don't have a timetable for the process," he added.
Mr Tung also told reporters that the focus would now be on the Hong Kong economy and its recovery.
The BBC's Hong Kong correspondent, Chris Hogg, said Mr Tung has put on a brave face but it is without doubt an embarrassing climb-down for him and his administration.
Two of his key ministers have stepped down over the controversy surrounding the bill, and Mr Tung himself has faced calls for his own resignation.
By putting the bill on hold, Mr Tung has accepted that he needs to win the support of the community before he can take these proposals forward any further.
Our correspondent says Mr Tung will be looking to win the consensus of the silent majority who did not voice opposition to the bill.