The US government has announced it will hand over its control of the technical co-ordination and management of the Internet's domain name system (DNS).

The announcement came last night at a meeting of Internet governance experts in Washington, and sees the US government return to its original stance over the Net, undoing some of the confusion caused by the announcement of a series of "principles" released by the Bush administration last year.

However there remains some debate over how and when the US government should relinquish control of the private, non-profit overseeing organisation ICANN that is in effective charge of the DNS. Those in favour of completing a transition which began in 1998, said the political price of having the US involved in DNS management has become too high and holds back the international development of the Internet.

Meanwhile, others warned that ICANN isn't yet ready to take on this task alone and a premature withdrawal by the US government could compromise the Internet's security and stability.

The US Department of Commerce called Wednesday's public meeting as part of its consultation process on the upcoming expiration of its agreement with ICANN to co-manage the DNS. That deal ends in September. In the weeks preceding the meeting, about 700 written comments were sent to the Commerce Department, a huge proportion of which urged the US government to reconsider its approach. It seems to have listened.

John Kneuer, acting administrator of the Commerce Department's National Telecommunications and Information Administration (NTIA), said the US government remains committed to the transition, but not at any price. "We have an incentive and a long-standing policy to complete this transition," he said. "But we will take no actions that will [compromise] the stability and security of the Internet."

Internet Society president Lynn St. Amour argued on behalf of handing over the DNS reins to ICANN sooner rather than later, saying that ICANN is ready and it's time to quiet the political static caused by the U.S. government's participation. "We continue to be concerned about attempts to politicise the Internet and its management," she said. "As long as the US government has a role in ICANN’s governance and management, organisations and other governments have an incentive to try to leverage political channels to their favor."

Others, like Tim Ruiz, vice president of corporate development and policy of registrar, said that the US needs to remain involved and the agreement extended. "It's premature to consider ending the [agreement] so we're requesting some extension be made," he said, citing concerns about accountability mechanisms and governance issues.

Independent of what happens, there are two main challenges that need to be addressed, said Marcus Sachs, from independent non-profit research organisation SRI International.

One is the security of the DNS, he said. "A lot of the problems we have today are largely based on the fact that the DNS itself, mechanically, doesn't have built-in security," he said. Solving this is critical for increasing consumer confidence and the level of e-commerce activity, he said. The other problem is ensuring the DNS can scale up as the Internet grows in decades to come, Sachs said.

Despite the US government decision to bow to international pressure, Kneuer said it still intended to retain control of the root zone file - the directory file at the top of the Internet. That stance too is likely to be challenged by other countries around the world.