The Saudi authorities have once again postponed the allocation of the country's first Internet Service Provider (ISP) licences.

Over 40 IT companies have been short-listed to provide Internet access in Saudi Arabia, a country with a population of 19 million and an estimated half a million computer users, and the lucky winners will be expected to be operational by the end of the year.

Although a small number of government offices, foreign businesses and Saudi princes already access the Internet by dialling up service providers outside the country, there is no local Internet access, making Saudi Arabia the last Gulf Arab state not yet on-line.

Internet services are likely to be a lucrative business, with an estimated 120,000 subscribers expected to sign up within the first year of operation.

But because of concerns over the possible influx of pornography and politically sensitive material, government officials say the introduction Internet services requires careful planning.

Prospective ISPs have been required to submit detailed financial information about themselves - and also needed to demonstrate some patience.

Short-listed companies have been waiting throughout Monday to learn whether they have been chosen as ISPs, only to be told that the selection has been postponed by a week, until 19 October.

This has been the second delay in Saudi Arabia's Internet programme, and the managing director of a Saudi IT company told the BBC that such difficulties had made a number of potential investors to think twice before funding Internet projects in Saudi Arabia.

ISPs will also face a high degree of centralisation. In order to filter out material which the authorities consider undesirable, a government-appointed body will become the node through which all web-sites will be accessed.

Using technology imported from abroad, the King Abdulaziz City for Science and Technology in Riyadh has installed a system that will prevent end-users from viewing pornographic, politically sensitive, or fanatically religious material.

The ultimate arbiter on what will be permissible will be the Ministry of Interior, but the system is expected to be updated on a daily basis.

Yet the spokesman for a Saudi opposition group in London said that that such filters were largely irrelevant since the country was already inundated with what is considered immoral material through satellite television.