Police in an east China county have dropped the detention warrant for a business journalist over his reports that allegedly ruined a local company's reputation.

Lishui City police in Zhejiang Province ordered the Suichang County officers to cancel the warrant on Qiu Ziming, reporter with The Economic Observer newspaper, and apologized to the journalist, zjol.com.cn, a Zhejiang-based news website portal, reported yesterday.

The scrap came one day after Huang Jinghong, a senior official with the Suichang police, said the warrant was issued in a proper legal manner.

Lishui police launched an investigation into the issue after an online post disclosing the warrant sparked wide protests that the police were trampling on media independence and protecting a local company.

In a survey by Sina.com, 87 percent of almost 45,000 respondents regarded the detention warrant as illegal. Ninety-eight percent believed the reports were truthful.

Lishui police said Qiu published four stories since May in The Economic Observer indicating Suichang-based Zhejiang Kan Specialties Material Co Ltd was involved in back-door trading.

The company is listed on the Shenzhen market with the code 002012.

Suichang police issued the detention warrant against Qiu on July 23, accusing him of "ruining a firm's business reputation."

But the Lishui police found the detention warrant was issued unlawfully. A further investigation is ongoing.

The Economic Observer published an announcement on Wednesday defending Qiu's reporting as reliable and based on sound evidence. The newspaper said it applied strict scrutiny before publishing the stories to ensure their credibility.

The newspaper also said that Kan bribed or threatened the reporter and newspaper to retract the negative reports but was ignored.

Kan dismissed the bribery accusation. Tian Zhiqiang, Kan's board secretary, told The Beijing News yesterday that the company had never bribed the reporter.