Dhaka: Bangladesh's army-backed interim government released former prime minister Begum Khalida Zia on bail on Thursday after a year in prison on alleged graft charges, an official said.

She was arrested on September 3 last year in an anti-corruption drive by the interim authority, but the High Court granted her bail on Tuesday on the last of four charges she faced.

Khalida's release came while an appeal by the government against her bail was still pending at the Supreme Court.

Lawyers and home ministry officials said the Supreme Court could cancel the bail after hearing the appeal, probably on September 15, but more likely would uphold the bail in light of the country's political necessities.


They said the release of Khalida and her rival, former prime minister Shaikh Hasina, who is now on parole, was important to ensure their parties take part in a parliamentary election planned for December.

Khalida heads the Bangladesh Nationalist Party (BNP) and Hasina the Awami League  the country's two biggest political parties with massive popular support, though their top leaders have been tainted in a series of corruption charges.

The two women, who ruled Bangladesh for 15 years to October 2006, deny any wrongdoing and accuse the interim government, which took over in January 2007 following months of political violence, of harassing politicians.

The government moved to bail Khalida after diplomats, analysts and civil society leaders said that no credible election could be held if she remained behind bars, because her party would boycott and try to thwart it.