The move against the journalists was widely condemned
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One of India's oldest newspapers has withdrawn its request for federal security forces to guard its offices.
The editor of The Hindu had said his staff were being intimidated by the Tamil Nadu state police.
The state government and The Hindu have been on a collision course after the newspaper published articles critical of Chief Minister J Jayalalitha.
The state parliament had ordered the arrest of five of the journalists working for The Hindu.
The journalists had been sentenced to 15 days in jail.
But India's Supreme Court has temporarily blocked the arrests.
'Gross abuse'
The move to deploy federal security forces outside The Hindu office in the southern city of Madras was criticised by the chief minister.
In a letter to Indian Home Minister, LK Advani, Ms Jayalalitha described the move as "unwarranted and against the spirit of federalism".
She said there was absolutely no threat to the editor or the staff of the paper and the move would cause irreparable damage to the state government's relations with Delhi.
Journalists and politicians had described the state assembly's move to arrest the journalists as an attack on democracy.
The Hindu has maintained the articles were simply "a rather measured criticism of the chief minister".
Correspondents say the case is a sign of the ever-worsening relations between Ms Jayalalitha, a former film star and one of India's most controversial politicians, and one of India's most respected dailies.