Google has sold its stake in Baidu.com in a move that will allow the American internet search and advertising company to go head-to-head with its largest Chinese rival.

The move signals competition is heating up for access to China's rapidly expanding community of wealthy online consumers.

Google bought about 2.6 per cent of Baidu.com’s outstanding Class A ordinary shares for about $5 million before the Chinese search engine’s initial public offering in August last year. The shares are valued at more than $60 million (£33m), based on Baidu.com’s current stock price.

Google executives have admitted for some time that the stake was too small to allow Google to gain leverage in the rapidly expanding Chinese market.

However, Google’s entry into China, a move which saw it agree to toe Beijing’s strict line on censorship by blocking results for search terms such as "Tiananmen", has been fiercely criticised by human rights organisations.

Earlier this month there were signs of internal divisions within the highest ranks of the company when Sergey Brin, Google’s billionaire co-founder, said the company had adopted "a set of rules that we weren’t comfortable with". Google operates under the motto "do no evil".

The company has since reaffirmed its commitment to the territory, which is seeing an explosion of internet user numbers. According to the Shanghai-based research company IResearch, the number of Chinese online will more than double to 232 million by 2010.

In April, Google Google rebranded itself as "Gu Ge" - or "Valley Song" - in China in an effort to improve on its position as a distant No2 in the Chinese search market.

Baidu.com’s American depositary shares closed down $4.20, or 5 per cent, at $80.20 on Nasdaq. In the past year, the company’s stock has traded between $44.44 and $153.98 after floating at $27. Google closed down $2.18 at $399.95.

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