The Chinese government has “delayed” enforcing the edict that would have compelled vendors to install its confounded Green Dam Internet-filtering software on all the Windows PCs sold in the country starting July 1. It said Tuesday through one of its house organs that it hadn’t give vendors enough time to respond.

It didn’t give a new drop-dead date. And it’s unclear whether Beijing has thrown in the towel because of the national and international outcry provoked by the move or is simply waiting for the grievous vulnerabilities in the “spyware” to be fixed.

The US government, representing HP and Dell, has been leaning on its Chinese counterparts saying that it violates free trade agreements.

Twenty-two international business associations have complained that it threatens security, privacy and free speech. Ditto the European Union.

The software, created by a couple of Chinese firms under contract to the Chinese government, is ostensibly supposed to protect kids against pornography but it can just as easily be used to block sites the Chinese government finds politically “subversive.”

The Wall Street Journal says it “stores screenshots of users’ computers and has the ability to shut down non-Internet applications if a user is typing something it doesn’t like.”

It has also been found to illegally contain parts of an American net nanny program made by Solid Oak Software and is riddled with serious technical flaws.

Solid Oak sent cease-and-desist letters to American PC OEMs. Sony, Lenovo and Acer however have reportedly already buckled under to the edict. Other companies claim the order doesn’t apply to boxes made before July 1.

Green Dam has already been installed on computers in Chinese schools and Internet cafes, and PCs sold in rural China under a government subsidy program.

According to the Journal last week the Chinese government ordered health-related web sites that cover research on sexually transmitted diseases to only allow access to medical professionals.