The Chinese ministry of information industry said it had finished investigation into the license case on Google's new Chinese language site and the result would be published soon.
The new controversy comes on the heels of strong criticism of Google in the US for yielding to Chinese demands to censor search results so that sensitive words such as 'democracy' and 'Tiananmen Square' were removed and not seen by Chinese net surfers.
MII spokesman Wang Lijian said the ministry paid great attention to the case of Google.cn that was reported in the media. He said the Beijing Communications Administration was still investigating the problem and that its results, too, would soon be published, Xinhua news agency reported.
Media reports on Tuesday accused Google of not having obtained the Internet Content Provider license needed to operate its new China searching site - Google.cn in China that was launched by Google.Inc during the recent Chinese Spring Festival period late last month. The company's PR agency denied media reports saying Google's licensing was "totally within the legal framework".
Google has been using the ICP license of a Chinese company, Ganji.com, under a business tie-up. On the Google.cn screen, the license number is displayed at the bottom of the page.
The practice has been followed by many international Internet companies in China. Currently, Yahoo Inc and Ebay both have similar license arrangements with Google Inc.
President of Google's China company Li Kaifu said using another company's ICP license is a common practice taken by many international companies at early transition phases after entering China.
Li said Google had close contacts with the Chinese government since the time it entered the country. As a law-abiding company, Google was willing to receive guidance from the Chinese government, he said.
According to Li, Google plans to apply for governmental approval for operating a business in China after its transition period.
Joint ventures or buying stakes were among the business possibilities for Google, but the company would make the final decision based on the Chinese government's suggestions, Li was quoted as saying.
The Beijing News had on Tuesday reported that Google was breaching Chinese government Internet rules, as foreign companies were not allowed to operate without an ICP licence in providing local services.
The newspaper noted that in order to set up a platform on the Chinese mainland, overseas investors usually become minority shareholders in joint ventures with local Internet firms, or sign bilateral deals so that the foreign investor could transfer technical support to a Chinese client, instead of operating independently.
Illegal operation could lead to "rectification, fines, closure", or even "criminal" charges, the newspaper said.
