Officials of the Shanghai Pudong New Area government answer questions about entrapping drivers in operations against illegal cabs during a press conference in Shanghai, October 26, 2009.[Xinhua]

"I'm happy," sobbed the 19-year-old from Henan province after he received the apology from Shanghai City Administration and Law Enforcement Bureau for Pudong New Area District.

In addition, Sun was told he will be compensated for his ordeal.

Jiang said officers had paid a man to act as bait and entrap Sun, something that is illegal in China but a practice critics believe is widespread.

Jiang added that the findings of an investigation, which ended on Oct 20, conducted by Shanghai City Administration and Law Enforcement Bureau for Pudong New Area District, reached the wrong conclusion. That probe had claimed Sun was guilty and said the enforcement team had done nothing wrong.

Jiang said the government also wanted to apologize to the public for the incident.

"People who are responsible for illegal law enforcement and for the false investigation will be punished according to the law," Jiang said. "The Pudong New Area district government will learn a lesson from the incident and regulate law enforcement against illegal cab operations."

Sun, who had arrived in Shanghai two days earlier, was stopped on Oct 14 by a man begging for a lift. Three minutes later, he was cornered by traffic law enforcement police and accused of operating an unlicensed taxi.

Sun vehemently denied taking money from the man and severed his finger as a demonstration of his frustration and innocence.

Huang Hong, a senior official with the Pudong district government, confirmed that the man picked up by Sun - Chen Xiongjie - was on the payroll of the traffic law enforcement team and had been used by police as bait.

"Chen provided a false affidavit and denied the fact that he had previously engaged in illegal law enforcement," Huang said.

Also yesterday morning, Minhang district government announced it had withdrawn a penalty against Zhang Hui, who was fined 10,000 yuan ($1,470) in September for "operating an unlicensed taxi".

Zhang was stopped on Sept 8 by a man claiming to have severe stomach pain. The man said he could not find a taxi and needed to get to hospital. Five minutes later, Zhang's car was stopped by law enforcement staff and he was accused of operating a "black taxi".

Hao Jinsong, a lawyer representing both Sun Zhongjie and Zhang Hui, urged the government to investigate illegal law enforcement practices used to crack down on unlicensed taxi operators.

"Since the two incidents in Shanghai were reported, I have been receiving letters and calls from across the country from people telling me they were also trapped," he said. "It is estimated that several thousand drivers in Shanghai are trapped every year during police crackdowns against 'black taxis'."

The lawyer called on all 18 districts in Shanghai to investigate illegal law enforcement.

Jiang Liang admitted yesterday that Sun's case was not the only instance of illegal traffic law enforcement uncovered to date.

Shanghai municipal government announced yesterday it had set up a new team to regulate public transportation and raid illegal traffic law enforcement operations. It will be led by a vice-mayor.