Steve Pratt and Peter Wallace were arrested during the Nato bombardment of Yugoslavia.

The two men, and a Yugoslav colleague, Branko Jelen, have been held in a Belgrade prison for five months.

Australian Foreign Affairs Minister Alexander Downer said they were released after Yugoslav President Slobodan Milosevic yielded to international pressure to grant them clemency.

'Absolutely delighted'

Mr Pratt was seen on Serbian television making an apparent confession

Mr Pratt and Mr Wallace, who worked for the Care aid organisation, were reported to have been pardoned by Mr Milosevic.

They arrived in Croatia on Wednesday. There has been no information from Belgrade about Mr Jelen but Care say he is still in jail.

Care USA President Peter Bell was quoted on the organisation's website as saying Care was "absolutely delighted" at the releases.

The BBC's Jacky Rowland in Belgrade: "This case is not yet over"

He added: "Our delight is tempered by the fact that Branko Jelen is still in prison.

"Our thoughts remain with him and his family on this day, and we will continue to work tirelessly until he is released also."

Long jail sentences

The two Australians were arrested on 31 March, seven days after Nato began air strikes in response to Serb actions in Kosovo.

Freed: Peter Wallace

They were stopped as they tried to cross the border into Croatia on their way to Kosovo. Mr Jelen was taken into custody on 8 April.

Mr Pratt was sentenced to 12 years in prison, Mr Wallace to four years and Mr Jelen to six years for spying. The sentences were later reduced.

During their captivity, Serbian television showed Mr Pratt making an apparent confession to collecting information on Kosovo and the effects of Nato's bombing campaign.

Apart from that one occasion the aid workers have always said they were innocent of the charges.

Wife visited prison

The trial and sentence against the three Care workers sparked international condemnation and many appeals for their release, including one from UN Secretary General Kofi Annan.

Former Australian Prime Minister Malcolm Fraser and former South African President Nelson Mandela also called for the release of the men.

Mr Pratt's wife Samira is due to give birth soon, and she had recorded a two-minute video message asking Mr Milosevic for clemency.