In one of the most controversial sexual assault case on former chief of the International Monetary Fund, Dominique Strauss-Kahn, took a turn around as he was released from house arrest and the case moved a step closer to dismissal.

Prosecutors acknowledged to the fact that there were serious credibility issues with the hotel house keeper who accused Mr. Strauss Kahn of rape. The State Supreme Court in Manhattan, did not oppose his release and then freed him on his own recognizance.

This dramatic turnaround in the case has sparked debate about morals, the treatment of women and the U.S. justice system. And the case has importantly reshaped the French political landscape.

Facing one of the most highly publicized cases, Cyrus R. Vance, the Manhattan district attorney, who is just a year and a half into his tenure can be expected to have alteration in his political fortunes.

Mr. Strauss-Kahn, 62, was a strong contender for French presidency before these allegations which led to his resignation from this position at the IMF.

Mr. Vance’s office expressed extreme confidence in its case from the first court appearance. And at another court appearance, the prosecutors said the victim “offered a compelling and unwavering story” and that proof against Strauss-Kahn was growing every day.

Though these accounts varied greatly on Friday when Mr. Strauss-Kahn’s lawyers filed with Justice Michael J a letter sent to Mr. Strauss-Kahn which outlined some of what they had discovered about the accuser. She admitted lying in her application for asylum from Guinea and also admitted that her claim that she had been a victim of a gang rape in Guinea was also a lie, the prosecutors said.

Though the prosecutors have not dismissed the case, Mr. Strauss-Kahn will be able to move about freely but his passport will be retained.

Report by Sumit