A journalist has avoided jail over an erroneous article about the now prime minister of Timor-Leste, after a Dili court threw out the criminal defamation charges.

Raimundos Oki, a senior reporter for the Timor Post, and his former editor Lourenco Martins Vicente, were found not guilty of “slanderous denunciation on Thursday at the district court in Dili.

“You are free, you can return to your normal activities and please be careful in reporting news,” judge Ivan Gonçalves said.

Prosecutors had pushed for one year’s jail for Oki and a two-year suspended sentence for Martins.

“The victory does not belong to me and Lourenco Vicente but it belongs to those who believes in freedom of speech and freedom of the press in Timor-Leste and all over the countries in the world,” Oki said. “I thank you very much to all of the supporters fighting against criminal defamation.”

The November 2015 article claimed Rui Maria de Araújo, as an adviser to the finance minister, had recommended a winning bid for a government supply contract, but misnamed the company.

Under Timor-Leste press law, Araújo was given a right of reply the following week, and a correction of Oki’s report and apology was published the following day.

But in January 2016, Araújo – who became prime minister in early 2015 – filed a criminal defamation suit, and the case then lay with prosecutors.

Timorese and international human rights and press freedom organisations campaigned for the government to step in. Forty-eight hours before Thursday’s hearing Araújo wrote to the court advocating against jail time for Oki and Martins.

Supporters of the journalists said the case threatened freedom of the press in the young democracy, and called for the government not to use the penal code against journalists instead of established communications law.

The International Federation of Journalists (IFJ), the Timor-Leste Press Union and the Timor-Leste Journalists Association, welcomed the court’s decision.

The IFJ general secretary, Anthony Bellanger, said: “This is a pivotal victory for press freedom in Timor Leste and reinforcement of national and international solidarity against criminal defamation and an attempt to send journalists to jail for simply doing their jobs.”

However Bellanger added the organisation remained “gravely concerned” at how far the case had gotten.

“Timor Leste decriminalised defamation in 2009, and yet here we are in 2017, dealing with this case,” he said.

“The lives of Oki and Lourenco have been deeply impacted by this case. Now we just hope they can get on with their work and doing the important job of keeping the public informed and undertaking their investigations without fear of jail.”

José Belo, Timorese journalist and former head of the Timor-Leste press union, suggested the case would have a chilling effect on journalists.

“Other journalists will be afraid to do serious stories. This is a beginning of a new era, where the politicians will do whatever they can to put a journalist in jail,” he said.