Hong Kong leader Carrie Lam has announced the withdrawal of a controversial extradition bill that has plunged the city into its worst political crisis in decades, a source with direct knowledge of the matter says.

Lam made the announcement in an internal meeting with pro- establishment lawmakers and Hong Kong delegates of China's National People's Congress.

In the video above: Hong Kong protestors burn Chinese flag

She is expected to make a public announcement later on Wednesday.

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A senior government source also confirmed the impending announcement to Reuters of the withdrawal.