A breakdown in negotiations with the Government has led to Google today ceasing to censor its search engine results in China in a move that will put one of the world’s most powerful companies on a collision course with one of its most repressive governments.

The international group Human Rights Watch has described today as “a crucial moment for freedom of expression in China”. Meanwhile Reporters Without Borders has urged other internet companies in China to join Google in refusing to censor. “If a common front is established…the Chinese Government will have no choice but to allow access to a freer internet.”

A Google spokesperson told Crikey this morning that the Chinese Government had made it “crystal clear” that censorship was a non negotiable condition of Google’s continued presence in China.

In an act of defiance, Google has made arrangements which it describes as “entirely legal”, to route Chinese mainland search traffic through Hong Kong, making results available in the simplified Chinese characters that are the official language on the mainland.

At the same time, Google has set up a new website that will allow the world to see which of its services are being blocked in China, in anticipation that the Government will respond with increased blocking.

At the time of writing, the site showed that Youtube and Blogger were being blocked in China, but web, news, images and Gmail remained available.

Google says this level of blocking is not new. Such services have been blocked intermittently for a long time. But Google clearly anticipates that it is likely to get much worse.

In a post on its corporate blog early this morning Australian time, Google’s chief legal officer David Drummond announced that as of today, Google Search, Google News and Google images would not be censored in China.

The move follows Google’s announcement in January that together with more than twenty other US companies, it had been a victim of a sophisticated cyber attacks originating from China, and that the Gmail accounts of dozens of human rights activists connected with China were being routinely accessed by third parties.

Google announced at that stage that it was no longer prepared to censor results,and would enter negotiations with the Chinese Government. These negotiations have failed.

More than 600 Google staff work in China in three offices, with about half involved in research and development, and the others in sales. A Google spokeswoman said this morning that it was hoped the Government would not simply throw the company out of the country.

Staff would be maintained, although numbers of sales staff in the long term would obviously depend on whether or not local searchers were able to access Google through the Hong Kong site.

The impact on the business “remained to be seen” she said, but claimed that the decision had been made for human rights reasons, not commercial reasons.

In a clear attempt to protect local staff, the corporate blog post emphasised that all decisions on censorship had been made in the USA, and not inside China.

Google entered China in 2005, with the establishment of a Research and Development Centre in Beijing, followed by another in Shanghai in mid 2007. Today the company offers 40 products on the local Google.cn domain, which was launched in January 2006.

While the company has nowhere near the penetration in China that it enjoys elsewhere in the world, it has thousands of adword partners among local businesses.

Google’s move has been welcomed by Human Rights Watch as “an important step to challenge the Chinese Government’s use of censorship to maintain control over its citizens.”

This would have to be one of the biggest media stories of the year, if not the decade. And it is not only about media. It could also, quite possibly, change the future of the world.