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The Chinese government appears to have backed down in the face of public opposition to its plans for mandatory installation of censorship software on all new computers.The Green Dam Youth Escort program, which restricts access to pornography and politically sensitive websites, was due to be compulsorily incorporated in the hard drives of all new machines sold after 1 July, but the state-run media announced today that it would instead be an optional package.

Secret documents published online and investigations by hackers have revealed an embedded blacklist of politically sensitive words in the program, a hole in the system that potentially allows remote users to take control of an individual's computer and a defective pornography algorithm.

Amid growing controversy over the apparent underhand censorship, the state media are now downplaying the compulsory aspect of the software. "PC makers are only required to save the set-up files of the program in the hard drives of the computers, or provide CD-Roms containing the program with their PC packages," the English-language China Daily quoted an official saying yesterday ."The users have the final say on the installation of the Green Dam Youth Escort, so it is misleading to say the government compels PC users to use the software … The government's role is limited to having the software developed and providing it free."

Computer makers in China have been instructed to pre-install blocking software on every PC hard drive from next month, under a government push to control access to the internet.The new software, which has been developed by companies working with the Chinese military, is specifically aimed at restricting online pornography, but it could also be used to strengthen barriers to politically sensitive websites.

China's authorities currently block overseas-based sites they disapprove of, such as those relating to Tibetan independence, or the Falun Gong spiritual movement, with a mesh of filters and keyword restrictions, widely known as the Great Firewall.

The new software – called Green Dam Youth Escort – potentially adds a powerful new tool at the level of the individual computer. It updates a list of forbidden sites from an online database, much as network security programs automatically download the latest defences against new worms, trojans and viruses.The software, designed to work with the Microsoft Windows operating system, also collects private user data.

China has defended the use of new screening software that has to be installed on all computers.Foreign ministry spokesman Qin Gang said the software would filter out pornographic or violent material.

All computers sold in China - even those that are imported - will have to be pre-installed with the "Green Dam Youth Escort" software.

The directive says the newest version of the software has to be pre-installed on Chinese-made computers before they leave the factory. Imported computers must contain the software before they are sold.