Georgia’s ruling party has said it will withdraw a controversial draft law, in the face of mass protests and widespread international criticism.
Thousands of protesters have taken to the streets in Tbilisi this week in anger as a Russian-style law began its passage through parliament.
Under the bill, non-government groups and the media would be targeted if they took over 20% of funding from abroad.
The main ruling party said it was pulling the bill “unconditionally”.
Describing itself as a government party responsible for all members of society, the Georgian Dream is referred to as the need to reduce “confrontation” in society.
Georgia has applied for candidate status of the European Union and is seeking to join Nato. EU officials had condemned the draft legislation as incompatible with EU values.
The government’s U-turn followed a second night of clashes between riot police and protesters outside parliament. Tear gas and water cannon were used to disperse the demonstrators as they chanted “no to the Russian law”.
Protesters arrested during the demonstrations have been released, according to the Ministry of Internal Affairs.
Officials said some were brought before the court but the rest “were released based on the expiration of the term of stay in the pre-trial detention center”.
Meanwhile, Georgian President Salome Zurabishvili praised protesters for coming out against the proposal. Ms Zourabichvili had backed the demonstrations and had vowed to veto the bill, although ultimately the government would have had the power to override her move.
“I want to congratulate society on its first victory. I am proud of the people who made their voices heard,” Ms Zurabishvili said in a televised address from New York. “There is distrust towards the government as we pursue our European path.”
In its statement, Georgian Dream complained that the proposal had been unfairly labeled and said that as the “emotional background subsidies” it would explain the importance of the bill and transparency in foreign funding to the public.
Despite the decision to drop the bill, opposition parties said they had no plans to stop the protests. They called for clarity on how the proposals were to be withdrawn and demanded the release of the protesters detained this week.
Armaz Akhvlediani, an independent opposition member of parliament and former secretary-general of the Georgian Dream, welcomed the party’s promise to withdraw the legislation but said it had “Russian interests” that worked against “democracy and rule of law”.
Prime Minister Irakli Gharibashvili had earlier condemned the “stir” over the bill. His party maintained that the legislation mimicked American laws from the 1930s, an argument also used by the Kremlin when it passed a similar law in 2012.
Kremlin Press Secretary Dmitry Peskov said Russia had “absolutely nothing” to do with the bill, as he sought to distance his country from the protests.
He said the Kremlin did not inspire the proposal and that the US “pioneered the practice of introducing these laws”.
Mr Peskov also advised Russians living in Georgia to be “extremely careful” and stay away from the street riots.
That Russian law has gradually intensified and now suppresses Western-funded NGOs, independent media, journalists and bloggers, who are required to label their content with the sinister phrase “foreign agent”.
“Again and again they are trying everything to take us far away from the European Union, European values,” said 30-year-old protester Luka Kimeridze.
Eka Gigauri of Transparency International in Georgia told the BBC that NGOs were already subject to 10 different laws and the finance ministry already had full access to accounts, funding and other information.