Former IMF chief's house arrest ends

ANew York Cityjudge ended house arrest forformer IMF leader Dominique Strauss-Kahn on Friday after prosecutors acknowledged there were questions about the credibility of the hotel housekeeper who accused him of sexual assault.

He wasreleased without bail on his own recognizance during a hearing in State Supreme Court. His lawyer said Strauss-Kahn willreturn to court as needed. The next court session in the case is scheduled July 18.

The agreement approved by Justice Michael Obus in Manhattan does not give Strauss-Kahn his passport back, meaning he can't head to France anytime soon, but his bail payment was returned.

The criminal case against him stands.

The Manhattan District Attorney's Officeagreed to the releaseafter it uncovered serious questions about the credibility of amaid who accused Strauss-Kahnof assaulting her inNew York's ritzy Sofitel hotel in May.

The Associated Press, quoting a person familiar with the investigation, said itlearned about the agreement shortly before the 62-year-old Strauss-Kahn arrived for the hearing amid a throng of reporters, cameras and onlookers. He is accused of crimes including attempted rape and denies the allegations.

Questions raised about the story

Investigators have come to believethe woman lied about some of her activities in the hours around the alleged attack and about her own background, the court heard.

The stark turn in the case came after the woman admitted to prosecutors she had made up a story of being gang raped and beaten in her homeland of Guinea to enhance her application for political asylum, prosecutors said in a letter to defence lawyers.

She also misrepresented what she did after the alleged attack instead of fleeing to a hallway and waiting for a supervisor, she went to clean another room and then returned to clean Strauss-Kahn's suite before telling her supervisor that she had been attacked, prosecutors said.

She also misrepresented her income and claimed someone else's child as her own dependent on tax returns, they said.

After his arrest, Strauss-Kahn resigned from his post leading the International Monetary Fundand watched his presidential ambitions seemingly crumble. On Tuesday, the IMF's board named French Finance Minister Christine Lagarde as the first woman to lead the global lending organization.

Prosecutors haven't necessarily reached a new conclusion about the allegations against Strauss-Kahn and have not decided whether to downgrade the charges, an official familiar with the case told The Associated Press.

Authorities have said they have forensic evidence of a sexual encounter, but defence lawyers have said it wasn't forced.

Investigators had earlier said they found traces of Strauss-Kahn's semen on the maid's uniform, indicating an encounter, and they haven't backed away from that.

'Those who know Dominique Strauss-Kahn will not be surprised by this evolution of events. What he was accused of has no relation to his personality.' Defence lawyer Leon Lef Forster

But the serious reduction in bail on from a $6 million in cash bail and bond under house arrest in a pricey townhouse, to nothing signals the case is not as serious as initially thought.

The New York Police Department, which investigated the case, declined to comment Thursday.

The maid told police that Strauss-Kahn chased her down a hallway in his $3,000-a-night suite in New York's Sofitel hotel, tried to pull down her pantyhose and forced her to perform oral sex before she broke free.

If the case collapses, it could once again shake up the race for the French presidency. Strauss-Kahn, a prominent Socialist, had been seen as a leading potential challenger to conservative President Nicolas Sarkozy in next year's elections until the New York hotel allegations embarrassed Strauss-Kahn's party and led to his resignation from the IMF.

"Those who know Dominique Strauss-Kahn will not be surprised by this evolution of events," one of his French lawyers, Leon Lef Forster, told The AP in Paris. "What he was accused of has no relation to his personality. It was something that was not credible."

Another of his defence lawyers, William Taylor, said Friday's developments were a "great relief," adding thatit's important observers and the mediarefrain from judgment "until the facts are all in."

The woman's lawyer, Kenneth Thompson, maintained that his client was sexually assaulted by Strauss-Kahn and that the hotel housekeeperintends to go public with her story. Hedid notspecify when that might happen.