Arizona Governor Jan Brewer has vetoed a controversial bill that has been derided by critics as a license to discriminate against gays in the name of religion, saying the measure could result in "unintended and negative consequences".
The measure, passed by the Republican-controlled state legislature last week, would have allowed business owners to cite personal religious beliefs as legal grounds for refusing to serve same-sex couples or any other prospective customers.
But a number of major business organisations and some fellow Republican politicians, including the state's two US senators, had urged Brewer to veto the legislation, dubbed Senate Bill 1062.
"Senate Bill 1062 does not address a specific or present concern related to religious liberty in Arizona," Brewer said in a brief statement from her office at the state capitol announcing her decision, to cheers from gay-rights activists rallying outside the capitol.
"I have not heard one example in Arizona where a business owner's religious liberty has been violated," she said. "The bill is broadly worded and could result in unintended and negative consequences. After weighing all of the arguments I have vetoed Senate Bill 1062 moments ago."
The announcement came hours after Major League Baseball and the National Football League joined a growing chorus of business organisations denouncing or expressing strong reservations about the legislation.
Echoing calls for Arizona boycotts previously stirred by Brewer's support for tough measures to clamp down on illegal immigration, the Hispanic National Bar Association also said on Wednesday that its board had voted unanimously to pull its annual convention from Phoenix in light of last week's passage of 1062.
The measure gained final approval from the Republican-controlled state legislature last week, putting Brewer at the center of a contentious political debate at a time when she has sought to ease partisan discord while focusing on efforts to revive Arizona's economy.