STOCKHOLM/LONDON, May 19 (Reuters) - Swedish prosecutors dropped an investigation of WikiLeaks founder Julian Assange on Friday over a rape allegation, but British police said he would still be arrested if he left the Ecuadorean embassy in London where he has been holed up for five years.

Assange, 45, took refuge in the embassy in June 2012 to avoid extradition to Sweden after two women made rape and sexual molestation allegations against him, which he denies.

He feared Sweden would hand him over to the United States to face prosecution over WikiLeaks' publication of swathes of classified military and diplomatic documents in one of the largest information leaks in U.S. history.

Assange tweeted on Friday that he would not forgive those behind the investigation: "Detained for 7 years without charge while my children grew up and my name was slandered. I do not forgive or forget."

Earlier Swedish Chief Prosecutor Marianne Ny said the rape investigation could not proceed because of legal obstacles.

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14 PHOTOS Julian Assange See Gallery Julian Assange WikiLeaks founder Julian Assange makes a speech from the balcony of the Ecuadorian Embassy, in central London, Britain February 5, 2016. REUTERS/Peter Nicholls/Files A supporter of Wikileaks founder Julian Assange holds a banner outside the Ecuadorian embassy in London as he marks three years since Assange claimed asylum in the embassy on June 19, 2015. WikiLeaks founder Julian Assange clocks up three years inside the Ecuadoran embassy in London today, after claiming that Swedish prosecutors cancelled a landmark meeting in his case earlier this week. AFP PHOTO / JUSTIN TALLIS (Photo credit should read JUSTIN TALLIS/AFP/Getty Images) A supporter of Wikileaks founder Julian Assange holds banners outside the Ecuadorian embassy in London as he marks three years since Assange claimed asylum in the embassy on June 19, 2015. WikiLeaks founder Julian Assange clocks up three years inside the Ecuadoran embassy in London today, after claiming that Swedish prosecutors cancelled a landmark meeting in his case earlier this week. AFP PHOTO / JUSTIN TALLIS (Photo credit should read JUSTIN TALLIS/AFP/Getty Images) Julian Assange, Founder and Editor-in-Chief of WikiLeaks speaks via video link during a press conference on the occasion of the ten year anniversary celebration of WikiLeaks in Berlin, Germany, October 4, 2016. REUTERS/Axel Schmidt TPX IMAGES OF THE DAY WikiLeaks founder Julian Assange appears on screen via video link during his participation as a guest panelist in an International Seminar on the 60th anniversary of the college of Journalists of Chile in Santiago, Chile, July 12, 2016. REUTERS/Rodrigo Garrido File photo dated 05/02/16 of WikiLeaks founder Julian Assange, who will publish more confidential documents on the US Central Intelligence Agency once a "key attack code" has been disarmed, he has revealed. File photo dated 5/2/2016 of Julian Assange who has defended the release of emails by WikiLeaks about US presidential candidate Hillary Clinton. WikiLeaks founder Julian Assange speaking from the balcony of the Ecuadorian Embassy in London where he has been living for more than three years after the country granted him political asylum. BERLIN, GERMANY - OCTOBER 4: WikiLeaks founder Julian Assange participates via video link at a news conference marking the 10th anniversary of the secrecy-spilling group in Berlin, Germany on October 4, 2016. (Photo by Maurizio Gambarini/Anadolu Agency/Getty Images) The Spanish journalist Ignacio Ramonet presents in Quito, Ecuador, on June 23, 2016 the Ecuador 's book " When Google found Wikileaks". Julian Assange made his appearance to the world in 2010 with the publication by WikiLeaks of thousands of secret documents revealing conspiracies , corruption, crimes , lies, and incriminate several governments and particularly the United States as the main actor illegalities. (Photo by Rafael Rodrï¿½uez/ACGPHOTO/NurPhoto via Getty Images) LONDON, ENGLAND - FEBRUARY 05: Wikileaks founder Julian Assange prepares to speak from the balcony of the Ecuadorian embassy where he continues to seek asylum following an extradition request from Sweden in 2012, on February 5, 2016 in London, England. The United Nations Working Group on Arbitrary Detention has insisted that Mr Assange's detention should be brought to an end. (Photo by Carl Court/Getty Images) LONDON, ENGLAND - FEBRUARY 05: A panel of WikiLeaks representitives and press look on as WikiLeaks founder Julian Assange speaks at a press conference at the Frontline Club via video link from the Ecuadorian Embassy in London on 5 February 2016 in London, England. Mr Assange's speech comes a day after it was announced that the UN panel ruled he was being unlawfully detained at the Ecuadorian Embassy. (Photo by Chris Ratcliffe/Getty Images) Australian founder of whistleblowing website, 'WikiLeaks', Julian Assange speaks to media after giving a press conference in London on July 26, 2010. The founder of a website which published tens of thousands of leaked military files about the war in Afghanistan said Monday they showed that the 'course of the war needs to change'. In all, some 92,000 documents dating back to 2004 were released by the whistleblowers' website Wikileaks to the New York Times, Britain's Guardian newspaper, and Germany's Der Spiegel news weekly. Assange also used a press conference in London to dismiss the White House's furious reaction to the disclosures. AFP PHOTO/Leon Neal (Photo credit should read LEON NEAL/AFP/Getty Images) MELBOURNE, AUSTRALIA - MAY 21: (AUSTRALIA OUT) Wikileaks founder Julian Assange poses during a portrait shoot on May 21, 2010 in Melbourne, Australia. (Photo by Mark Chew/Fairfax Media/Fairfax Media via Getty Images). Up Next See Gallery Discover More Like This HIDE CAPTION SHOW CAPTION of SEE ALL BACK TO SLIDE

"We are not making a statement about his guilt," Ny said, adding that the investigation could be reopened if Assange came to Sweden before the statute of limitations deadline for the rape allegation in 2020.

However, police in London said they were still obliged to arrest Assange if he left the embassy for skipping bail. They said this was a much less serious offense than rape, but he could still face up to a year in jail if convicted.

Assange is a cyber hero to some for exposing government abuses of power and championing free speech, but to others he is a criminal who has undermined the security of the West.

The former computer hacker enraged Washington by publishing hundreds of thousands of secret U.S. diplomatic cables that laid bare often highly critical U.S. appraisals of world leaders from Russian President Vladimir Putin to the Saudi royal family.

He always denied the rape allegations in Sweden and said they were a ploy to get him whisked off to the United States.

WANTED BY WASHINGTON

In January, Assange said he stood by an offer to go to the United States providing his rights were upheld and if former military intelligence analyst Chelsea Manning, who was responsible for a 2010 leak of classified materials to Assange's anti-secrecy group, were freed.

Manning was released on Wednesday after spending seven years in a U.S. military prison for passing the documents to WikiLeaks.

British Prime Minister Theresa May said on Friday it would be "an operational matter for the police" to decide whether to arrest Assange if he left the embassy.

Asked if she would support Britain extraditing Assange to the United States, she said: "We look at extradition requests when we receive them on a case-by-case basis."

Last month CIA Director Mike Pompeo called WikiLeaks a "hostile intelligence service," and Attorney General Jeff Sessions, responding to a question about Assange, said the administration was stepping up its efforts against all leaks of sensitive information.

"Whenever a case can be made, we will seek to put some people in jail," Sessions said.

During last year's U.S. presidential election campaign, WikiLeaks published emails from Hillary Clinton's staff and the Democratic National Committee which some believe helped to lose her the election. The mails were allegedly stolen by Russian hackers.

"TOTAL VICTORY"

While Assange may still not be able to leave Ecuador's embassy in the upmarket Knightsbridge area of London, the prosecutor's decision to stop the investigation into allegations of rape brings to an end a seven-year stand-off with Sweden.

The case has raised questions about the Swedish justice system, with a United Nations panel saying Assange had been subject to "arbitrary detention."

Prosecutors have been accused of vacillating, first dropping the preliminary investigation and then re-opening it and of dragging their heels over questioning Assange.

Prosecutors first interviewed Assange in November last year in the Ecuadorian embassy. They were not allowed to question him directly but only through an Ecuadorean prosecutor.

Assange's lawyer Per Samuelson hailed Sweden's decision to drop the investigation as "a total victory for us."

"That's because we finally were able to get the interview done (with the Swedish side) and he could describe what really happened and also because we could show that the United States is hunting him, which we could not do before," Samuelson said.

(Additional reporting by Johannes Hellstrom,; Johan Ahlander, Niklas Pollard and Olof Swahnberg; Editing by Guy Faulconbridge and Gareth Jones)

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