The adoption of the amendments put an end to a 10-year tug-of-war between the government and housing pressure groups which began on the eve of handover. Democratic Alliance for the Betterment and Progress of Hong Kong legislator Chan Kam-lam had proposed the median rent-to-income ratio of 10 per cent when legislators debated a law to insulate tenants from sharp rent rises.

The cap led to a three-year legal battle between tenants and the authority that ended two years ago. In 2002, the authority was sued for not reducing rents during deflation. The Court of Final Appeal ruled the cap applied only when a decision was made to raise rents, and it was not a statutory definition of affordability.

After reviewing the rent adjustment mechanism, the authority decided to drop the median clause.

The amendment bill also specifies that a rent adjustment review - whether to increase or reduce rents - be held every two years.

It gives the authority the power to compile an index to track tenants' changes of income. If it shows the tenants are earning more, there will be a rent increase equivalent to the percentage increase in income. The same would apply to cuts. The index will be compiled by the Census and Statistics Department.

The authority made a last-minute concession at the end of last month by promising rent rise would not be more than 10 per cent, prompting major political parties to support the government.

Meanwhile 18 protestors were arrested last night for alleged contempt of Legco after they shouted slogans and displayed banners in the public gallery when Mr Suen was speaking. Two security guards and a protestor were slightly injured in a scuffle and taken to hospital. Proceedings were disrupted for about five minutes.