Hong Kong's government on Thursday backed down from introducing a controversial privacy law following a campaign by journalists who said the move would infringe on press freedoms.
Critics slammed the government over a bid to restrict access to information about company directors, after such details were used in a series of investigative reports to expose the hidden wealth of Chinese officials.
Several business groups have also said the proposal would hurt the Asian financial hub's transparency and could encourage fraud.
The government said it would shelve the proposal -- which would have allowed company directors to have their residential address and identity card number blocked from public view -- to allow time for consultation.
"We hope to give more room for the community to reach a consensus," a spokeswoman from the Financial Services and the Treasury Bureau, which is tasked with introducing the bill, told AFP.
The government had said the proposed law was meant to protect the directors' privacy but it sparked an uproar among critics wary of Beijing's meddling in local affairs and after a number of reports focusing on the wealth and assets of China's ruling elite grabbed headlines.
Financial newswire Bloomberg has said it used Hong Kong and Chinese identity card numbers from corporate filings to chart business ties and a list of investments made by the extended family of China's incoming president Xi Jinping in a report published in June last year.
The New York Times also said it used such information from Hong Kong over a story in October that showed outgoing premier Wen Jiabao's relatives had control of assets worth at least $2.7 billion, a report Beijing branded as a smear.
The Hong Kong Foreign Correspondents' Club lauded the government's decision.
"We believe the government should withdraw the changes all together to maintain Hong Kong's corporate transparency and reputation as a world financial centre," the club president Douglas Wong said in a statement.
Journalists have spoke out against the proposal and published a petition that was endorsed by about 1,800 individuals in newspapers.
A large number of Chinese companies are listed in Hong Kong, a financial hub that acts as a gateway for international firms seeking to tap the booming Chinese market.