Friday, 05-Sep-2003 5:10AM

AFP / Peter Lim

HONG KONG, Sept 5 (AFP) - Hong Kong's government on Friday scrapped plans to introduce controversial security legislation which sparked massive protests and triggered the territory's worst political crisis since the 1997 handover.

Chief executive Tung Chee-hwa said moves to revive the legislation later this month had been indefinitely postponed because there was still widespread concern over the law, which critics say threatens Hong Kong's political, religious and media freedoms.

"In order to give people enough time to understand the law, we decided to postpone it," Tung told reporters at a press conference to announce the dramatic policy climbdown.

The initial security bill, drawn up under Article 23 of Hong Kong's post-1997 constitution, was shelved by Tung earlier this year after more than 500,000 people marched through the streets in protest here on July 1.

The march and subsequent large-scale demonstrations led to the resignation of the government's two most unpopular ministers, Financial Secretary Antony Leung and Security chief Regina Ip.

Tung told reporters Friday there was no timetable for re-introducing the bill and stressed no replacement legislation would be put forward without extensive public consultation.

He said the government had also decided to postpone the bill in order to help the recession-hit economy, which was battered by the Severe Acute Respiratory Syndrome (SARS) outbreak between March and June.

"We believe the community needs to focus on the economy which has had a hard time with SARS. We need to get the economy going again and the whole community needs to be focused on reviving the economy," he said.

However, Tung reiterated that Hong Kong was constitutionally obligated to legislate Article 23, adding that the security bureau had set up a taskforce to conduct a further review of the bill.

Pressure had mounted on Tung's administration to back down on the security bill after parties across the political spectrum expressed disquiet over the legislation.

Legislator Lee Chuk-yan, who spearheaded the massive July protests, said the announcement marked a "victory for the thousands of people who forced the government to make an about-turn."

China's central government said Friday that it approved of the Hong Kong government's decision to withdraw the subversion law.

"The SAR government has decided to withdraw the concerned draft legislation and step up consultations with the public... We believe that the decision and arrangements of the Hong Kong SAR government are appropriate," a statement issued by China's foreign ministry said.

The British consulate said in a statement that it was pleased the Hong Kong government had delayed the enactment of the law.

"We hope that there will be the widest possible consultation before legislation Article 23 of the Basic Law is reintroduced into the Legislative Council," it said.

Analysts said the decision to postpone the legislation indefinitely had probably been taken with Beijing's approval.

"It is a strategic move made by both Beijing and the Hong Kong government to win the hearts and minds of the people," said Sonny Lo, political analyst at the University of Hong Kong.

"The objective is to rescue the declining popularity and the legitimacy of Tung's government," he said, noting that Beijing has promised economic measures to help Tung's beleaguered administration since the crisis.

Paul Harris, political commentator at Lingnan College, said the postponement would buy Tung precious time.

"Tung can only benefit through delay," Harris said. "With Beijing's support, and in order to maintain order, it is better not to force Article 23 down people's throat".

Law Siu-kai, director at Hong Kong Human Rights Commission, said he believed Tung was "echoing" orders from Beijing.

"Tung's decision will help protect the image of Beijing as well as enhancing the position of pro-China elements in Hong Kong," said Law. "If not, Tung's governance will be in crisis," he added.

Hong Kong is required, under the terms of the 1997 handover from Britain to China, to enact national security legislation banning treason, sedition, subversion and the theft of state secrets.

Critics are concerned China could use the law to suppress freedoms, stifle reporting of official abuses, prevent protests against the government and block access to legal representation.

http://www.ptd.net/webnews/wed/at/Qhongkong-subversion.RNba_DS5.html