WARSAW, Jan 10 (Reuters) - Poland's media regulator has annulled a 1.5 million zloty fine it slapped on leading news broadcaster TVN24 last month over its coverage of protests in parliament in 2016.
The punishment, which immediately prompted accusations that it was aimed at muzzling the media, put the ruling Law and Justice party (PiS) in a difficult situation as it was imposed days after it replaced Prime Minister Beata Szydlo with a moderate former bank CEO in a bid to improve the cabinet's tarnished image.
"After getting acquainted with the positions of the social side and additional analyses and arguments presented by the interested party (TVN24)... the President of the National Council of Radio Broadcasting and Television decided to repeal the decision," the regulator said in a statement on Wednesday.
Critics said the KRRiT media watchdog had punished the U.S.-owned broadcaster in an effort to mute its criticism of the ruling party amid speculation the Polish state may take over TVN24.
The U.S. State Department condemned the fine. The United States is Poland's key ally in the light of increased Russian assertiveness.
Polish tax authorities last year demanded that TVN, TVN24's parent company, pay 110 million zlotys in allegedly unpaid taxes. TVN is challenging the order.
Polish media extensively covered last year's protests in parliament including a blockade of the rostrum by opposition leaders after PiS imposed curbs on media access to the legislature.
Since winning election in late 2015, the PiS, has been increasingly at loggerheads with the European Union over immigration quotas for EU member states and its placing of courts and media under increased state control. (Reporting by Marcin Goclowski and Pawel Sobczak; editing by)