The Government has backed down in its attempt to censor media content online and on mobile phones, despite claiming in public, including on Radio National’s Breakfast program this morning, that there never was a problem.

Crikey has seen a recently authored departmental position paper that lays out major changes being made to the draft Bill, which was leaked to and published by Crikey earlier this week.

The position paper states that the Minister, Senator Helen Coonan, “has decided to amend the approach taken in the original exposure draft”.

In particular, the Government has junked the extraordinary plan to make it a criminal offence to provide “prohibited” or “potentially prohibited” content online.

Instead, the Australian Communications and Media Authority will be given powers to issue “take down” notices to those who have posted or streamed problematic material. This is consistent with the present system of regulation for Internet content.

A sop is thrown to the Mobile Phone industry by promising the new approach will reflect aspects of its existing self regulation scheme – which already age restricts M15+ content.

Yet modern mobile phones can be used to access the internet – so it is not entirely clear how the new scheme would operate.

Meanwhile, Minister Helen Coonan’s advisers have been reassuring content providers that there is no intention to make content, including books and magazines, illegal online that would be legal if sold in other forms – although this would have resulted had the original draft Bill been passed.

The position paper says that “while the final drafting language is yet to be settled”, work is underway to remove some of the worst contradictions and overlaps between the draft Bill and existing legislation.

“Key elements” of the modified approach will include “better coordinating existing regulatory regimes in order to provide as far as possible a consistent framework for all content that is delivered over a carriage service.”

What precisely does this mean? It isn’t clear.

The Government plans to retain some elements of the original flawed draft, including a broad definition of a content service and the long list of exemptions, although it acknowledges that these make it difficult for content providers to know whether they are caught in the net.

“To a significant extent, it is expected that these concerns will be alleviated by the implementation of a take-down regime, where the initial responsibility of any content provider is to take down content or remove access to it. Compliance with a take-down notice would normally be the end of the matter. ..It is not intended that ISPs or other service providers be required to filter prohibited content from their Internet traffic.”

But the implications for bloggers, self-published authors and others remain unclear, and as reported elsewhere in Crikey today, the blogosphere is building a head of steam on the issue.

There are clearly still numerous issues to be worked through to achieve the aim of protecting children without stifling freedom of speech or throttling new media – yet in answer to questions this morning, Senator Coonan’s office confirmed that the Government plans to introduce this legislation “shortly”, and has said there will be a full Senate Committee inquiry.

The Minister’s office is now claiming that more than 20 industry groups have been consulted – but Crikey’s information is that many key groups were brought into the net only recently, as a result of our publication of the Government’s plans.

There is little doubt that the original flawed and draconian draft Bill was the result of a stuff up, and extra pressure following the Big Brother turkey-slapping incident, rather than a conspiracy – but if there is a lesson to be drawn it is about consultation.

If content providers had been consulted early, then the Bill would have been better and, more importantly from the Department’s point of view, nobody would be leaking and I wouldn’t have a story.

Now Coonan’s advisers are assuring everyone that they will be happy with the final legislation – but surely, with so many issues still to be ironed out and a clear need for wider consultation, this legislation cannot be introduced “shortly”.