Hong Kong leader Carrie Lam has delayed indefinitely a proposed law to allow people to be extradited to mainland China for trial, after widespread anger and large-scale protests in the Asian financial hub.

Key points: It is one of the most significant backdowns by the Government since Hong Kong was returned to Chinese rule

It is one of the most significant backdowns by the Government since Hong Kong was returned to Chinese rule People marched through Hong Kong last week in protest

People marched through Hong Kong last week in protest The bill has many concerned it may threaten the rule of law that underpins Hong Kong's international financial status

In one of the most significant backdowns by the Government since Hong Kong was returned to Chinese rule in 1997, Ms Lam said the city's legislature would stop all work on the bill.

Next steps would be decided after consultations with various parties, she said.

The extradition bill, which will cover Hong Kong's 7 million residents and foreign and Chinese nationals living or traveling in the city, has many concerned it may threaten the rule of law that underpins Hong Kong's international financial status.

Ms Lam told media on Saturday she took the move in response to widespread public unhappiness over the measure, which would enable authorities to send some suspects to stand trial in mainland courts.

"After repeated internal deliberations over the last two days, I now announce that the Government has decided to suspend the legislative amendment exercise," Ms Lam said.

"I want to stress that the Government is adopting an open mind … we have no intention to set a deadline for this work."

Ms Lam said she would "adopt a sincere and humble attitude in accepting criticism" over the Government's handling of the issue.

The announcement came ahead of another mass protest planned for Sunday and after clashes turned violent earlier in the week, leaving about 80 people injured, including 22 police officers.

Street demonstrations plunged the city into turmoil and added pressure on Ms Lam to back down. ( Reuters: Athit Perawongmetha )

Extradition bill has not been withdrawn

The stand-off between police and protesters in the former British colony is Hong Kong's most severe political crisis since the Communist Party-ruled mainland took control more than two decades ago with a promise not to interfere with the city's civil liberties and courts.

Britain agreed to return Hong Kong to Chinese rule with the signing of the Sino-British Joint Declaration in 1984.

The document promised to return the territory to China in 1997 under a "one country, two systems" principle, with Beijing guaranteeing Hongkongers a high degree of autonomy and freedoms for a period of 50 years.

British Foreign Secretary Jeremy Hunt welcomed the Hong Kong Government's backdown.

"Well done HK Government for heeding concerns of the brave citizens who have stood up for their human rights," Mr Hunt said on Twitter.

"Safeguarding the rights and freedoms in the Sino-British Joint Declaration is the best future for HK and Britain stands behind this legally-binding agreement."

Ms Lam was appointed chief executive of Hong Kong by a panel dominated by Beijing. ( AP: Vincent Yu, File )

Ms Lam previously said the extradition law was necessary to prevent criminals using Hong Kong as a place to hide and that human rights would be protected by the city's courts, which would decide on the extraditions on a case-by-case basis.

Critics, including leading lawyers and rights groups, argued that China's justice system is controlled by the Communist Party and marked by torture and forced confessions, arbitrary detention and poor access to lawyers.

Ms Lam apologised for what she said were failures in her Government's work to convince and reassure the public, but said she had not withdrawn the bill.

"We will try it again if circumstances permit," she said.

Appearing calm and cheerful, at least at first, Ms Lam parried questions over whether she should step down and said she had strong support from Beijing for her decision.

The announcement came ahead of another mass protest planned for tomorrow. ( AP: Kin Cheung )

"I can tell you the Central People's Government has confidence in my judgment and they support me," she said.

She did not confirm, when asked, if she had met with Vice Premier Han Zheng to discuss the situation, but said she had reported on the issue to Beijing.

Ms Lam emphasised that avoiding further injuries, both for the public and for police, was a chief concern.

"It's possible there might be even worse confrontations that might be replaced by very serious injuries to my police colleagues and the public," she said.

Residents like Chapman Chen are concerned the extradition bill will erode civil liberties. ( ABC News: Kathryn Diss )

"I don't want any of those injuries to happen."

Ms Lam defended the forceful moves by police during protests earlier in the week, saying some of those involved were "very violent".

Former officials urged Lam not to proceed

Prior to Saturday's announcement, some members of the Executive Council — Hong Kong's Cabinet — had asked Ms Lam to rethink plans to rush the bill's passage.

A group of former senior government officials issued a public letter urging her not to force a confrontation by pushing ahead with the unpopular legislation.

Ms Lam defended the forceful moves by police during protests earlier in the week. ( AP: Vincent Yu )

Adding to tensions, the extradition bill has drawn criticism from US and British politicians and human rights groups, prompting Beijing to hit back with warnings against "interference" in its internal affairs.

It is unclear how the local leadership might defuse the crisis, given Beijing's strong support for the extradition bill and its distaste for dissent — and for foreign pressure.

The decision to indefinitely walk away from efforts to drive the bill through the city's legislature by July would have been unthinkable last week, when the law's passage seemed inevitable and Ms Lam remained defiant.

Tens of thousands of Hong Kong protesters flooded the streets to demonstrate against changes to the extradition law that could see people sent from the former British colony to China for trial. ( ABC News: Brant Cumming )

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