(Refiles, clarifying Dec 2007 in fourth paragraph)
By James Pomfret
HONG KONG, Jan 15 (Reuters) - Hong Kong will delay a highly anticipated consultation on tweaking the electoral process for the city's leader and legislature in 2012, given the need to focus on the economy, the city's leader said on Thursday.
Chief Executive Donald Tsang described the downturn as a once-in-a-lifetime crisis, with the financial hub facing the prospect of another recessionary year and greater layoffs, making democratic reforms a lower priority.
"The present stage is not a desirable time for public consultation, I therefore have decided to defer the public consultation to the fourth quarter of this year," he said.
The former British colony of Hong Kong returned to Chinese rule in 1997 with a high degree of autonomy. In December 2007, China ruled out full democracy for the territory in 2012, ignoring popular opinion, but said it may pick its leader by universal suffrage in 2017.
In Tsang's policy address last fall, he pledged to release the political reform blueprint in the first half of 2009, aimed at making the 2012 polls more democratic.
The city's pro-democracy lawmakers, who have long agitated for universal suffrage as soon as possible, accused Tsang of finding another convenient excuse for delay.
"You lack credibility, you are not trustworthy," said pro-democracy lawmaker Lee Cheuk-yan, while other hardline democrats shouted barbs in the Legislative Council chamber and brandished a large inflatable banana in protest.
Tsang however stressed the consultation wasn't being scrapped and that Hong Kong remained committed to realising direct elections in 2017.
"We are facing the financial tsunami and we need to revise our policies, we should avoid further controversies and conflicts in the community in this critical period we shouldn't cause more trouble," Tsang said.
The city's leader is now chosen by an 800-person election committee stacked with Beijing loyalists, while only half its legislature is directly elected.
(Reporting by James Pomfret; Editing by Nick Macfie)