The Chinese government officially has reversed its decision that would have required all computers sold in the country to include filtering software.

Li Yizhong, China's minister of industry and information technology, announced Thursday that the so-called Green Dam software would only need to be installed on PCs in public places, such as schools and internet cafes.

At the end of June, the government said it was delaying the July 1 deadline for all computers sold in China to include the software. Thursday's announcement appears to have made that delay permanent.

The government has said the software is intended to censor pornography, but critics worry it also enables political censorship and may permit the monitoring of users' systems. University researchers also have determined that Green Dam contains security vulnerabilities.

Tom Kelchner, a research center manager at Sunbelt Software, which makes anti-virus solutions, said his company flagged the Green Dam software as malicious.

“In the middle of June, we labeled it spyware,” he told SCMagazineUS.com on Thursday. “From our point-of-view, it was a bad piece of software because it had the ability to monitor keystrokes and log URLs that users intended to reach.”

In addition, Kelchner said, the software permits data to pass unencrypted between client and server and can shut down applications. The program also is vulnerable to compromise, and public exploit code has been published.

The United State had warned the Chinese government that the requirement, first announced in May, could violate free trade agreements. Li called the now-scrapped regulations a "misunderstanding," according to reports.