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The US government says it will maintain oversight of the internet but with far less hands-on involvement.
Icann, the body which oversees the future of the net on behalf of the US, has been given more independence in a new agreement for the next three years.
Dr Paul Twomey, ceo of Icann, said the deal was "a major step forward for Icann autonomy".
The US government has pledged to cede control of the net to private sector hands at an unspecified future point.
The real feeling is that Icann is progressing, but it is not fully ready yet
Emily Taylor, Nominet
Icann, or the Internet Corporation for Assigned Names and Numbers, is a not-for-profit company formed in 1998.
It is the guardian of the underlying architecture of the net, overseeing allocation of domain names such as .com or .net, and the addresseing system that links domain names to the numbers computers understand.
It has always been intended that the net coordinator should eventually be a private organisation, but since it has been in existence Icann has been overseen by the US government.
In the past, the government has been criticised for having a stranglehold over Icann. In May 2006, the organisation hit controversy when plans for a .xxx domain for sexually explicit sites were rejected, a move that some saw as politically motivated.
Others believe that the oversight of the net should not be tied to one government, and several statements submitted to a hearing in July 2006 to discuss the future of Icann stated: "No single government should have a pre-eminent role in internet governance."