The international finance hub was rocked by the worst political violence since its 1997 handover to China on Wednesday as tens of thousands of protesters were dispersed by riot police firing tear gas and rubber bullets.
Those clashes came three days after Carrie refused to be budged by a record-breaking rally in which organisers said more than a million people marched through the streets calling for the bill to be scrapped.
After days of mounting pressure — including from her own allies — Lam relented on Saturday, announcing that work on the bill would be halted with no deadline set for its introduction.
The decision is a major victory for protest leaders and a rare U-turn from the city’s pro-Beijing leaders who have successfully faced down demands from pro-democracy demonstrators in recent years.
Lam — who is appointed by a committee stacked with Beijing loyalists — said she had no plans to step down, and defended the need to overhaul the city’s extradition laws and retained the support of China’s central government.
But she admitted her team had misjudged the public mood.
“I feel deep sorrow and regret that the deficiencies in our work and various other factors have stirred up substantial controversies and disputes in society following the relatively calm periods of the past two years,” she said.
Opposition to the Beijing-backed bill united an unusually wide cross section of Hong Kong from influential legal and business bodies, to religious leaders, western nations and the huge crowds hitting the streets.
Critics feared the law would tangle people up in China’s notoriously opaque and politicised courts as well as hammer the city’s reputation as a safe business hub.
But the furore was also the latest expression of public anger over fears that an increasingly assertive Beijing is stamping down on the city’s freedoms and unique culture.
Under a deal signed with Britain, China allowed Hong Kong to keep key liberties denied to people on the mainland, like freedom of speech and independent courts, for 50 years.
But critics accuse Beijing of reneging on that deal with the complicity of the city’s unelected leaders.
They point to the huge 2014 pro-democracy “Umbrella Movement” that failed to win any concessions, the imprisonment of protest leaders and the banning of some critics from standing for election, as recent examples.