A British National Party election candidate accused of publicly burning a copy of the Koran was freed today when the charge against him was unexpectedly dropped.

Sion Owens, 41, of Bonymaen, Swansea, South Wales, was arrested and charged at the weekend under Section 29 of the Public Order Act.

The BNP candidate in next month's Welsh Assembly elections spent the weekend in custody before appearing at Swansea Magistrates' Court.

He was warned today that police are continuing to investigate the alleged incident and to expect further action.

It is understood that his release was due to a technicality regarding the Act under which he was arrested and charged.

An unconfirmed source in court today claimed that the permission of the Attorney General must be sought before such a charge can be made.

In the case of Mr Owens, it was not.

His arrest and charge came after The Observer newspaper reported it had handed police a video which appeared to show Mr Owens dousing a copy of the Koran with paraffin before setting it alight.

Bryn Hurford, prosecuting today, read out the charge after Mr Owens was brought into court from a custody suite.

He said that he was accused of having in his possession "a record of visual images or sounds showing you burning a copy of the Koran whilst saying 'I am burning the Holy Koran and I hope that you Muslims are watching."'

Mr Hurford said police inquiries into the alleged incident would continue and a new file of evidence would be collected.

That file will be passed to the Crown Prosecution Service for review and advice.

He added: "I want the defendant and his legal representatives to be in no doubt that the withdrawal of the charge this morning does not mean that no proceedings will be taken.

"Almost certainly other proceedings will ensue."

Mr Owens, dressed in a black Fred Perry polo shirt with short sleeves and gold braid around the collar, was then released.