Sat July 5, 2003 09:06 AM ET

HONG KONG (Reuters) - Hong Kong leader Tung Chee-hwa, struggling to defuse the territory's biggest political crisis in years, bowed on Saturday to an outpouring of popular protest and withdrew two controversial clauses of an anti-subversion bill.

"After repeated and detailed discussions, we have decided to make amendments to further allay people's fears," Tung told a news conference, looking weary after days of crisis talks with his cabinet and senior advisers.

"I hope that after making the changes it will gain the acceptance of legislators."

Tung said he would withdraw a provision which would have given police sweeping search powers and scrap another which would have allowed the banning of groups in Hong Kong if they were outlawed on the mainland.

The government will also strengthen safeguards on press freedom. Journalists who report Chinese state secrets will be able to defend themselves if the news is in the public interest.

But the bill itself will be presented for final reading in the territory's legislature as planned, on July 9.

Half a million protesters took to Hong Kong's streets on Tuesday to denounce the anti-subversion law in the city's biggest demonstration since the 1989 Tiananmen Square massacre.

Critics fear the law will trample basic human rights and that dissent may soon be treated the same way it is in mainland China. The Falun Gong spiritual group, for instance, practices freely in Hong Kong but has been banned in China [...]

Many want the bill postponed outright to allow for more public consultation on the most important piece of legislation in Hong Kong since Britain returned it to Chinese rule in 1997.

"Mr. Tung's three major concessions are good signs, it augurs very well because he's finally woken up," said Martin Lee, one of Hong Kong's most vocal democracy advocates.

"The pity is, why go half the way but not all the way?" he said, favoring more discussion on the bill.

[...]

Analysts said the crisis over the bill could hurt Tung.

"I think that Tung has blown his last chance and probably the campaign from now on will be directly aimed at him," said political commentator Andy Ho.

Several legislators have demanded Tung and Security Secretary Regina Ip step down over their handling of the affair.

Opponents said they would press ahead with plans to surround the legislature on Wednesday, when the bill will be presented for its final readings. Commentators fear the atmosphere could be far more confrontational than Tuesday's peaceful demonstration.

"Despite the best intentions of the organizers, people are getting more frustrated. One can only expect their actions to become more radical," Ho said.

Just a week ago, passage of the bill appeared certain as the Legislative Council is packed with pro-government and pro-Beijing supporters.

But the mass outpouring of public anger forced many of Tung's staunchest allies to urge him to seek a compromise.

(Additional reporting by Vicki Kwong)

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