Strauss-Kahn released from house arrest

Dominique Strauss-Kahn, the former head of the International Monetary Fund, has been released from house arrest in the sexual assault case against him.

The French politician appeared briefly in a New York courtroom on Friday after reports that prosecutors had grave doubts about the credibility of Strauss-Kahn's accuser.

The judge stressed that the move does not mean that the "case is over" and prosecutors did not agree to dismiss the sexual assault case against Strauss-Kahn.

Strauss-Kahn was arrested in May, accused of trying to rape a hotel maid, and has been confined to a Manhattan apartment.

The 32-year-old hotel maid accused Strauss-Kahn of chasing her through his luxury suite in New York, trying to pull down her pantyhose and forcing her to perform oral sex.

He denies the allegations, saying the relationship was consensual.

His passport remained surrendered, and he will not yet be allowed to leave the country. However, one of his attorneys, Benjamin Brafman, said Strauss-Kahn would be free to travel within the US.

"It is a great relief, another of Strauss-Kahn's attorneys, William Taylor, said, adding that the case underscores "how easy it is for people to be charged with serious crimes and for there to be a rush to judgement."

"It is so important in this country that people, especially the media, refrain from judgement until the facts are all in," he said.

'Violent assault'

Revelations of major problems with his accuser's credibility were first reported in The New York Times.

Reports say investigators have come to believe that the woman lied about some of her activities in the hours around the alleged attack and about her own background.

Jacky Rowland reports on reactions in Paris

Prosecutors think she also lied about details on her application for asylum in the US, including saying she had been raped in her native Guinea, the newspaper said.

The accuser's attorney did not back down on the seriousness of the charges.

"From Day One she has described a violent sexual assault that Dominique Strauss-Kahn committed against her," attorney Ken Thompson said.

"She has described that sexual assault many times, to prosecutors and to me, and she has never once changed a single thing about that encounter," he said. 

Addressing reporters outside the court, he said the woman had walked into the suite to clean after being told no one was inside.

"Then Strauss-Kahn came running out of one of those rooms naked towards her and he grabbed her beasts first and started to attack her. He then grabbed her vagina with so much force that he hurt her ... that he bruised her vagina," Thompson said.

"When Dominique Strauss-Kahn threw the victim to the floor he tore a ligament in her shoulder. She may now need surgery for the damage he caused to her shoulder".

Strauss-Kahn, 62, was arrested in New York on charges of sexual assault. He resigned from the IMF on May 19 and pleaded not guilty on June 6, vehemently denying the allegations. If convicted, he faces up to 25 years in prison.

Strauss-Kahn's arrest also shook up French politics as he was a leading contender for French presidency from the Socialist Party. His supporters claim that he was being set up. If charges against him are dropped, it could throw the presidential race in France wide open.

French Finance Minister Christine Lagarde was appointed as the new IMF chief on Tuesday. 

Christine Lagarde named first female chief of IMF

. Christine Lagarde has been named as the new head of the International Monetary Fund, ending a fiercely fought contest dominated by Europe's intensifying debt crisis.

The French finance minister secured one of the key positions in international finance after the US government declared its support, giving her the majority of votes she needed among the IMF's 187 member countries.

"The results are in: I am honored & delighted that the board has entrusted me with the position of MD of the IMF!" Ms Lagarde said via Twitter minutes after the announcement. French President Nicolas Sarkozy's office declared it a "victory for France". The fund's Executive Board insisted on Tuesday that the 55 year-old, who will be the IMF's first female head and the fifth person from France to lead the insititution, had been chosen by "consensus."

"The executive board of the International Monetary Fund today selected Christine Lagarde to serve as IMF managing director and madame chairman of the executive board for a five-year term starting on July 5, 2011," the Fund said in a statement. Lagarde, it said, "is the first woman named to the top IMF post since the institution's inception in 1944".

With Greece's debt crisis again casting a shadow over financial markets and sparking violent protests on the streets of Athens, Ms Lagarde has little time before she has to prove that she can act as an independent voice for the IMF in what will be tense negotiations with European leaders over a second bail-out for the indebted country. She starts in her role at the IMF in Washington DC on July 5. Tim Geithner, the US Treasury Secretary, praised Ms Lagarde for her "exceptional talent and broad experience" as the Obama administration broke its silence on who its preferred candidate earlier in the day.

The Frenchwoman had been the strong favourite to succeed Dominique Strauss- Kahn, the former managing director who resigned last month to fight charges that he sexually assaulted a hotel maid in New York. Her only rival in the race, Agustin Carstens, Mexico's central bank governor, had argued that someone from outside Europe would be better placed to help the IMF play a useful role in tackling Europe's ongoing debt crisis.

Other emerging economies also voiced concern that the position should not automatically go to a European, a tradition since the fund was created in 1944 and that in returns has seen an American lead The World Bank.

Though Ms Lagarde won the backing of the governments of China and Brazil, they, alongside other emerging economies and the US, will want to ensure the IMF doesn't readily hand over further money to Greece if a second bail-out is unlikely to work. Bond investors expect that Greece will eventually default on its debts. The backing of Washington and Europe gave Ms Lagarde the support of 49pc of the voting quotas on the 24-member IMF executive board. UK Chancellor George Osborne described Ms Lagarde as the "outstanding candidate" to take over the helm of the world financial body