New York: Former IMF chief Dominique Strauss-Kahn was on Friday freed from house arrest and the sexual assault charges against him by a hotel maid appeared to be crumbling after prosecutors acknowledged flaws in her version.

In a brief hearing at the State Supreme Court in Manhattan, prosecutors did not oppose the release of 62-year-old Strauss-Kahn, who resigned as IMF chief in May following his arrest on the sexual assault charges. However the  judge let him go  scotfree.

Strauss-Kahn, considered to be a strong contender for the French Presidency before his arrest, was bundled out of a Paris-bound flight and taken into custody on charges of sexually assault by the 32-year-old chambermaid, who went to clean his USD 3,000 suite in New York's Sofitel hotel in May.

Prosecutors, who had earlier contended that there was enough evidence to nail Strauss-Kahn, on Friday, admitted before Justice Michael J Obus that the case was not as strong as suggested earlier.

Strauss-Kahn will be allowed to travel inside the US. He will also get back his USD 1 million bail and USD 5 million bond.

The Guinean maid had alleged that when she had gone to clean the room, Strauss-Kahn had chased her down a hallway, tried to pull down her dress and forced her to perform oral sex before she broke free.

While the defence insisted that the sex had been consensual, the prosecution appeared to be confident in the maid's story. Strauss-Kahn had pleaded not guilty to charges of rape and sexual abuse.

The maid reportedly called a man, who was in jail for possessing 400 pounds of marijuana, to discuss ways to exploit Strauss-Kahn.

She also told investigators that her asylum application said that she had been previously raped but the application does not say so.

While the case has not been dismissed yet, the new information damages the maid's credibility as well as the case. Prosecutors, who no longer believe her, are even considering dropping the felony charges.

If the case collapses, Strauss-Kahn, a prominent Socialist, could once again be in the race for the French Presidency as a potential challenger to conservative President Nicolas Sarkozy in 2012.

While prosecutors have retained the passport of Strauss-Kahn, many of the bail conditions imposed on him have been lifted.

Under the strict bail conditions, Strauss-Kahn was not allowed to step outside the apartment at 71 Broadway, in the heart of New York's financial district. The building itself was besieged by US camera crewmen with satellite TV trucks and a contingent of French journalists.