Philip Virgo, strategic director of Eurim, the IT parliamentary lobbying group, said: "The postponement is welcome and we need to get industry, users and enforcement agencies on to the same wavelength and decide how we can go forward."
Virgo told CW360.com that the wide-ranging powers that were being proposed would have made a "mockery" of current security procedures and would have been a "charter for hackers and frauds" looking to take advantage of the extended investigative powers.
Virgo called on the Government to focus on helping to deliver better quality electronic evidence in the case of e-commerce crime, which can be accepted in a court of law, rather than increasing the number of organisations that can take part in surveillance.
Brian White, Labour MP for north-east Milton Keynes and a former IT professional, told CW360.com: "This was the right decision, the Government needs to talk further with industry."
White said that UK-based businesses, users and ISPs needed equity with their overseas counterparts for UK ISPs. The proposed extensions to the RIP Act would have put the UK "at a competitive disadvantage," he said.
White said the Government would have considered the civil liberties issue and the protests that erupted, but he believed it was the anti-competitive nature of the proposed laws that would have been key to the Government's decision.
He added: "I wrote to Blair about this, along with other MPs, and the Government listened. They should be commended."
Tim Conway, policy director of Intellect (formed by the recent merger of the Computer Software and services Association and Federation of Electronic Industries), was also pleased that the Government had re-considered adopting the draft laws.
Conway said: "David Blunkett made the right decision. Notwithstanding the civil liberties question, there would have clearly been a negative impact on the UK, with a vast increase in the range of requests being generated for servers and databases located in the UK."