Hungary's Prime Minister Viktor Orban on Friday said he was scrapping a draft Internet tax law that has sparked mass demonstrations in the central European country.
"The Internet tax cannot be introduced in its current form," Orban said in a radio interview.
The proposed legislation was seen by critics as another attempt by the right-wing prime minister to silence dissent in the country and had led tens of thousands of demonstrators to take to the streets twice this week in protest.
Orban has said the tax law needed to be amended, and that a "national consultation" on the Internet and taxes would be organised in January.
"My problem is not that people oppose a tax. Here people question the rationale of the issue. Nothing can be introduced in these circumstances. This debate is derailed," Orban said, adding that the government sees the tax as a technical issue.
The proposed tax -- criticised by the European Union -- would have been capped at 700 forints (2.30 euros, $3) a month.
Opponents of the Internet tax have called for a "celebratory" demonstration on Facebook for Friday evening.