Iran's chief prosecutor says American backpacker to be freed on $500,000 bail

Iran is to free an American backpacker arrested more than a year ago and accused of spying in return for half a million dollars in bail money, the country's chief prosecutor said on Sunday, reported by Telegraph.

Abbas Jafari Dolatabadi made the offer after a weekend of confusion over government claims that Sarah Shourd, 32, was about to be allowed to return home on humanitarian grounds.

The original decision to let her leave Evin prison in Tehran, where she has been held with her fiancé and another friend since being arrested on the Iraq border in July last year, was countermanded by Mr Dolatabadi on Friday night.

His statement hinted at a continuing conflict between President Mahmoud Ahmadinejad, who had backed the release, and a faction opposed to him inside Iran's conservative elite which controls the judiciary.

A new statement from the chief prosecutor said she would now be released on grounds of illness.

"For the female defendant, bail has been set at five billion Iranian rials (about $500,000)," Mr Dolatabadi said. "She can be freed by posting the bail."

Her lawyer, Masoud Shafii, said it was possible she would be released overnight.

Miss Shourd was arrested with her fiancé, Shane Bauer, and Josh Fattal, during a hiking holiday in the mountains of Iraqi Kurdistan. They were accused of crossing the border with Iran, which they claim they did unwittingly, if at all.