In an unprecedented expression of America's global might, a court in Philadelphia issued a ruling yesterday on freedom of information in cyberspace whose legal consequences will be felt all around the world.

Three federal judges blocked enforcement of a law signed by President Bill Clinton in February which banned "indecency" on the Internet. The Communications Decency Act made it a crime, punishable by up to two years in jail, to transmit sexually offensive material which might be accessible to children. But the judges said that the act violated First Amendment guarantees on free speech and was therefore "constitutionally intolerable".

American law becomes, in this case, international law because 60 per cent of the material disseminated on the worldwide computer network originates inside the United States. It is estimated that 35 million people in 160 countries are linked up to the Internet.

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The first major judicial ruling on the boundaries of freedom on the Internet came in response to an appeal against the act by a coalition of on-line service providers, such as Microsoft and America Online, and US pressure groups which felt the government had violated their First Amendment rights.

The principal objections to the act were that it failed adequately to define "indecent", and that it sought to impose the same narrow restrictions on the Internet as existing laws do on American broadcast media. The act's opponents argued it would be more appropriate if the Internet was granted the wider legal latitude afforded to material that appears in print.

They also made the point that laws are already in the statute books imposing limits on obscenity, especially as regards child pornography, to which users of the Internet were as liable as anybody else.

Heading the anti-act coalition was the American Libraries Association (ALA), many of whose 80,000 member libraries feared that because they had been making their publications available on-line they would expose themselves to the risk of criminal sanction. The ALA argued in court that because of the vagueness in the act adults using the Internet would be limited to reading books deemed suitable only for young children.

The possibility existed not only that Lady Chatterley's Lover and Joyce's Ulysses would be deemed "indecent", but that medical writings on, for example, breast cancer and AIDS would be too.

The American Society of Newspaper Editors figured also among the plaintiffs because they feared material deemed legally suitable in print would be declared criminal on-line, thus presenting them with potential difficulties when transmitting the contents of their publications on the Internet.

The judges were unanimously persuaded that the framers of the US constitution, unprepared as they would have been for cyberspace, would have agreed that the Communications Decency Act went too far.

"Just as the strength of the Internet is chaos," the judges ruled, "so the strength of our liberty depends upon the chaos and cacophony of the unfettered speech the First Amendment protects . . . As the most participatory form of mass speech yet developed, the Internet deserves the highest protection from government intrusion."

The government, however, remains determined to intrude. Backed by organisations on the religious right, lawyers representing the government said plans were under to appeal the Philadelphia ruling in the US Supreme Court.