Hungary has cancelled plans to introduce a tax on internet data traffic after large-scale protests in Budapest.
Demonstrators opposed to the proposed levy of 150 forints (40p) per gigabyte of data traffic passing through data centres in the country threw old computer parts at the offices of Hungary's ruling Fidesz party.
Prime Minister Viktor Orban told Kossuth Radio: "This tax in its current form cannot be introduced. If the people not only dislike something but also consider it unreasonable then it should not be done."
Orban admitted that the tax plans cannot go ahead as "the debate has gone astray" and "a common basis is missing", arguing that the plans were merely an extension of the existing telecommunications tax.
The government had planned to use the internet tax revenue to bolster Hungary's budget in 2015.
"We really should see somehow where the huge profits generated online go, and whether there is a way to keep some of it in Hungary and channel it into the budget," Orban said.
The tax proposal met with opposition from the European Commission, which said that the move would limit freedom and had a wider economic and social impact.
Neelie Kroes, vice president of the European Commission, welcomed the policy rethink. "I'm very pleased for the Hungarian people. Their voices were heard," she said.
"I'm proud the European Commission played a positive role in defending European values and a digital Europe."
The idea of an internet tax would not be welcomed by World Wide Web founder Sir Tim Berners-Lee, who already believes that internet freedom is under threat from big businesses.
Government organisations appear to be getting embroiled in an increasing number of conflicts and debates over internet freedoms, the NSA's controversial PRISM programme being one of the most high-profile examples.
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