The Orthodox American businessman who has spent the last 18 months in a Bolivian jail without charge has been released on bail.

Grandfather Jacob Ostreicher, who was accused of allowing his rice farming business to be used as a front for money-laundering for the drugs trade, was ordered to pay more than £8000 in bail money and will remain under house arrest.

The 52-year-old from Brooklyn denies all charges against him.

Congress members Chris Smith and Nydia Velazquez recently travelled to the Palmasola prison and campaigned for Mr Ostreicher’s release. They announced his release on Tuesday.

Mr Smith, a New Jersey congressman, told the JTA: "I urgently call on the Bolivian judicial system to act swiftly to completely exonerate Jacob of the baseless accusations against him and grant him his freedom."

Mr Ostreicher has claimed that corrupt officials kept him in jail so they could sell 18,000 metric tons of rice that had been confiscated from him in exchange for promises of release. Local authorities have subsequently arrested seven people, including officials, for extortion.