The National People's Congress Standing Committee decision quashed hopes of universal suffrage and extensive changes to the election of the chief executive and legislature in and after 2007.

It did not, however, mention any timetable for future reform.

The Standing Committee ruled that the arrangement of returning half the seats in the Legislative Council by functional constituencies and the other half by geographic constituencies should remain unchanged in 2008. The current voting procedure should also be retained.

Democrats immediately reacted with anger, staging a walkout during a meeting with visiting Standing Committee deputy secretary-general Qiao Xiaoyang at Government House last night.

Yesterday's ruling said the methods for selecting the chief executive in 2007 and the legislature in 2008 could be 'appropriately modified' in accordance with the principle of 'gradual and orderly progress' and must not violate the premise laid down in the decision.

The Standing Committee ended its two-day meeting by also emphasising that any change to the electoral methods should be conducive to the balanced participation of various social strata and parties, the efficient operation of the executive-led government and the maintenance of Hong Kong's long-term prosperity and stability. It said the number of directly elected members in Legco had increased remarkably since the handover, with half the seats to be returned by direct elections in September.

'The impact of the directly elected members upon Hong Kong society's general operation, especially the influence upon the executive-led mechanism, remains to be tested by practice,' it said.

Different sectors of Hong Kong society still have considerable differences about methods for selecting the chief executive and the legislature after 2007, and no broad consensus has yet been reached, according to the decision.

'Under such circumstances, conditions do not satisfy the general election of the chief executive and the general election of all Legco members. Hong Kong's history of democratic elections is not long, and it has been for no more than seven years that Hong Kong residents have exercised the democratic rights of participating in selecting the chief executive.'

Chief Executive Tung Chee-hwa said he understood the public's concerns but claimed the decision was in Hong Kong's best interests. A report on the areas for change will be released by the taskforce headed by the chief secretary next month.

Mr Tung conceded there was no timetable on universal suffrage. It would depend on when Hong Kong could fulfil the principles previously outlined. 'If we can fulfil these principles and conditions and reach a consensus within the community, constitutional review can indeed move rapidly,' he said.

Beijing could not possibly give a timetable. 'Nobody could predict when Hong Kong would possess the conditions for universal suffrage,' Mr Tung said.

In a six-point elaboration on Hong Kong's actual situation, Mr Qiao said public understanding of the Basic Law was still insufficient. Some people even tried to undermine or distort the Basic Law.

Hong Kong had yet to meet the criteria for universal suffrage, he said, adding that introducing it in 2007 and 2008 was simply not in line with the gradual and orderly progress stipulated in the Basic Law.

Radical change would only result in confrontation. 'Hong Kong cannot pay the price for such political experiment,' Mr Qiao said.

He highlighted the importance of the business sector to Hong Kong's capitalism, saying balanced participation must be ensured.

Mr Qiao dismissed claims the Standing Committee's decision had no legal basis, saying the interpretation this month had already paved the way for deciding the need for changes according to Hong Kong's actual situation and the principle of gradual and orderly progress.

'Some people simply don't accept the interpretation. When you face east, they face west,' he said.

In Shanghai, Vice-President Zeng Qinghong said developing the economy would be the 'eternal theme' for Hong Kong. 'For Hong Kong and Macau, the eternal theme is developing the economy and improving people's livelihood.'

State Councillor Tang Jiaxuan also said what Beijing had done was in Hong Kong's interest and the public had no cause for worry. 'The central government has acted out of good faith. I hope the public will understand that.'

US and British officials expressed disappointment, with British Foreign Office Minister Bill Rammell due to meet the Chinese ambassador to raise concerns over the future of Hong Kong's autonomy.

Political analyst Kuan Hsin-chi, also head of Chinese University's department of government and public administration, warned that the decision against universal suffrage would make the public feel more despairing and helpless.

KEY POINTS OF THE COMMITTEE'S DECISION

No universal suffrage for electing the chief executive in 2007

No universal suffrage for Legislative Council election in 2008

The half-and-half ratio for members of Legco elected from functional constituencies and elected directly will remain unchanged in 2008

The procedures for voting on bills and motions in Legco shall remain unchanged in 2008

Specific methods for 2007 chief executive and 2008 Legco elections can be 'appropriately modified'