First reporting (updates at the bottom):

In a statement, South Carolina Attorney General Henry McMaster appears to have weakened his stance against the need for criminal investigation of Craigslist.

Read more stories on this subject in our Craigslist topic page.McMaster said, "We trust they will now adhere to the higher standards they have promised. This office and the law enforcement agencies of South Carolina will continue to monitor the site."

The announcement comes after Craigslist filed a lawsuit against the Attorney General seeking a "declaratory relief and a restraining order."

From McMaster's Web site:

COLUMBIA, SC – “The defensive legal action craigslist has taken against the solicitors and my office is good news. It shows that craigslist is taking the matter seriously for the first time

More importantly, overnight they have removed the erotic services section from their website, as we asked them to do. And they are now taking responsibility for the content of their future advertisements. If they keep their word, this is a victory for law enforcement and for the people of South Carolina.

Unfortunately, we had to inform them of possible state criminal violations concerning their past practices to produce a serious response. We trust they will now adhere to the higher standards they have promised. This office and the law enforcement agencies of South Carolina will continue to monitor the site to make certain that our laws are respected.”

Observant readers will note that Craigslist announced it would take down the "erotic services" section and bolster review practices prior to McMaster's announcement of investigation.

Update May 21: When several hours out and the reactions are rolling in.

Craigslist has claimed victory in a post titled, well, "Victory!" And FITSNews has offered up a well-said insight into the whole matter, in part:

Actually, what the Craigslist lawsuit shows is that not all companies are going to sit back and twiddle their thumbs while attention whore politicians habitually cross the line in pursuit of self-serving headlines.

...

Needless to say, nobody’s buying McMaster’s claim [of victory].

Unfortunately, FITSNews wrote their article before The State published their reporting, which totally did buy into McMaster's spin, in part:

In a prepared statement, McMaster, a probable Republican gubernatorial candidate next year, described the suit as “good news,” saying, “It shows that Craigslist is taking the matter seriously for the first time.”

“More importantly,” he continued, “overnight they removed the erotic services section from their Web sit, as we asked them to do. And they are now taking responsibility for the content of their advertisements. If they keep their word, this is a victory for law enforcement and for the people of South Carolina.”

And The State never did point out the obvious fact that six days ago those changes were immanent but not good enough for McMaster until he had been sued.

The Wall Street Journal has put together a nice concluding piece on the issue, but you'll have to pay to read it.

Meanwhile, a ring of seven people in New York has been indicted on charges of using Craigslist to run a prostitution ring -- which is exactly who I've said McMaster should be targeting all along, the offenders.