They were produced in court where prosecutors said all charges are being abandoned against five of them.

Prosecutors also dropped an attempted murder charge - punishable by 20 years in prison - against the remaining 26. In exchange they pleaded guilty to causing mischief during a disturbance, which is punishable by up to five years in jail.

All 26 were freed on bail, and will go on trial Dec 27.

The 31 were arrested on Nov 25 when more than 20,000 ethnic Indians demonstrated in the streets in an unprecedented public show of anger in defiance of a government ban.

They were charged with attempted murder for a non life-threatening head injury to one policeman, provoking an international outcry.

In the packed Sessions Court, cheers broke out when Attorney General Abdul Gani Patail told the judge that he was dropping all charges against five Indians and attempted murder charges against the 26 others.

'I could be very strict but I don't think this is the time to be that strict,' he said. Freeing them now would be the 'best course of action' in the public and national interest, he said.

'When we exercise the law...we look at what is fair and just...and in my judgment this is the fairest thing to do,' he said.

Several ethnic Indian social groups as well as an Indian-based political party, which is part of the ruling coalition, had urged Prime Minister Abdullah Ahmad Badawi to drop the attempted murder charges.

However, five leaders of the Hindu Rights Action Force, which organised the Nov 25 rally, remain in detention under the colonial era Internal Security Act that allows indefinite imprisonment without trial.

On Monday, rights groups staged a protest outside the government's National Human Rights Commission, urging the body to push for abolishing the ISA.

Ethnic Indians make up about 8 per cent of Malaysia's 27 million people, and most are at the bottom of the country's social and economic ladder. Malay Muslims comprise about 60 per cent of the population, and control the government.

Ethnic Chinese account for about a quarter and dominate business.

Hindraf is demanding equality and fair treatment for Indians, saying an affirmative action program that gives preferential treatment to Muslim Malays is tantamount to racial discrimination.

The Indians also complain their religious rights are being trampled.

Mr Vasantarao Appasamy, 19, one of those released, said he is happy to be out of jail. 'But I am just disappointed about this government.' -- AP