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The blog, written by Zhao Jing, was pulled last week for its coverage of how journalists at The Beijing News walked out on strike following the firing of its editor.

A spokesperson for Microsoft told the paper that it was a case of capitulating to China's political peccadilloes or not operating in the territory.

Last June, MSN caused similar controversy when it complied with China's demands to prevent users of the service in that country from using the terms 'democracy', 'freedom' and 'human rights' on the new Chinese version of Microsoft's Internet portal. Other words and phrases

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that have been blocked include 'demonstration' and 'Taiwan independence'.

Yahoo! too landed itself in a spot of bother in September when it was revealed that the Net giant had turned over subscriber information to the Chinese authorities that resulted in a 10-year sentence for a pro-democracy campaigner.

Yet as China slowly opens itself up to the rest of the world, it is seeing something of a gold rush by businesses in the Western world eager to get a foothold in the rapidly expanding economic power. Tech businesses in particular are chumming up to the Chinese government which insists that operations launching in the country must have its backing.

Last month a senior European Commissioner condemned US high-tech companies for pandering to the Chinese authorities and restricting freedom of speech in order to be able to do business in the People's Republic.

Writing in her blog Margot Wallstroem, the Commissioner for Institutional Relations and Communication, says that some companies 'have flexible ethical standards depending on where they operate.'