Probe of top Brazil politician continues

Mr Barbalho (left) was taken from his home by police

A Brazilian judge has set free a former president of the Senate facing charges of corruption and fraud, but the probe into the allegations will go on.

Jader Barbalho, once president of the country's largest political party, was arrested on Saturday in the Amazonian city of Belem after officials in the neighbouring state of Tocantins issued a warrant against him.

But a higher judge has ruled he does not need to be imprisoned during investigations into his alleged involvement in a funding scandal at a closed-down regional development agency, Sudam.

Mr Barbalho left the Senate to avoid impeachment

Mr Barbalho is one of the most powerful politicians in northern Brazil.

He used his power base in the backward Amazonian state of Para to influence which projects were approved by Sudam, which was closed down last year by President Fernando Henrique Cardoso because of corruption allegations.

Frog farm

According to the BBC's Brazil correspondent Tom Gibb, investigators found that well over $1bn was found to have gone missing.

Some of the money was allegedly diverted into agricultural projects set up by Mr Barbalho's business associates and family members but which were never implemented.

Mr Barbalho's ex-wife, for instance, is reported to have received a grant for a frog farm which investigators found to be largely abandoned.

Mr Barbalho's resigned from the Senate last October to avoid being impeached in connection with the allegations.

His resignation, which stripped him of Congressional immunity from prosecution, may have prompted prosecutors to act.

Four other top officials involved in running the development agency were also detained.

Mr Barbalho's lawyers have lodged a petition for his release to a higher court in the Brazilian capital, Brasilia, maintaining he is innocent.

Our correspondent says that even if the petition is granted, the mere fact that someone so powerful has been arrested will set a precedent.