Peru halts spy investigation

Montesinos was a close ally of President Fujimori

The Peruvian government has shelved an investigation into bribery allegations involving disgraced former intelligence chief, Vladimiro Montesinos who fled to Panama at the weekend.

The Attorney General, Nina Rodriguez Flores denied coming under pressure to drop the case, but the opposition said it showed there was a plot to protect Mr Montesinos.

According to my criteria and due to the evidence presented, I have decided to shelve the case

Attorney General

The investigation was opened after Mr Montesinos was secretly filmed while apparently bribing a member of congress.

The scandal led President Alberto Fujimori to call early elections in which he will not stand.

Opposition anger

Mrs Rodriguez's decision came as the government and opposition parties met again for tense talks on the transition to elections expected in March.

Scandal forced Fujimori to call early elections

The opposition expressed anger at the decision and demanded the state prosecutor to resign.

But Mrs Rodriguez told Reuters, "according to my criteria and due to the evidence presented, I have decided to shelve the case."

Although officially an adviser to President Fujimori, Mr Montesinos was widely considered the power behind the presidency and was accused of corruption, wiretapping and ordering torture.

Asylum challenge

Panama's government is studying a request for political asylum by Mr Montesinos who entered the country on a tourist visa.

Many in Panama are opposed to Montesinos's asylum request

Opposition politicians from Peru have travelled to Panama to challenge the asylum request.

"We've come here to argue that Montesinos does not legally qualify for political asylum," Mercedes Cabanillas of the opposition Popular American Revolutionary Alliance party (APRA) told a news conference.

"He's not a fugitive from persecution by the Peruvian government, but rather... a protege and an accomplice of all the actions (taken) by President Alberto Fujimori," she said.

Panama had earlier turned down Mr Montesinos's request, but the United States and OAS stepped up pressure to accept him, saying he could spark a coup if he stayed in Peru.

Over the last 25 years the Panamanian Government has given refuge to several deposed leaders, including the Shah of Iran and former rulers of Guatemala, Haiti and Ecuador.