A senior prosecutor said yesterday that Iran will release US hiker Sarah Shourd on bail, as he criticised President Mahmoud Ahmadinejad’s government for interfering in judicial issues.

Tehran prosecutor Abbas Jafari Dolatabadi said Ms Shourd, one of three US hikers detained in Iran for more than a year, had been granted bail on health grounds on a surety of about $500,000.

“For the female defendant (Shourd), bail has been set at five billion Iranian rials (about $500,000),” the official Irna news agency quoted Mr Dolatabadi as saying.

“She can be freed by posting the bail,” he said, adding the decision was taken after a “judge confirmed Ms Shourd’s illness”.

Ms Shourd’s mother Nora said last month her 32-year-old daughter was being held in solitary confinement despite suffering from a pre-cancerous cervical condition, a lump in her breast and depression.

Ms Shourd, arrested along with fellow hikers Shane Bauer and Josh Fattal on July 31, 2009 after straying into Iran from Iraq, was expected to have been freed on Saturday, but those hopes were dashed by legal technicalities.

The United States yesterday voiced cautious optimism that Iran would free Ms Shourd.

“Obviously we’re hopeful and encouraged by this news but there have been starts and stops in this. Before and until that actually happens, you know, we’re on a wait-and-see basis,” White House adviser David Axelrod told NBC.

But he declined to comment on the fate of Mr Bauer and Mr Fattal.

State Department spokesman Philip Crowley said meanwhile that US diplomats were working to bring all three hikers home. “We continue to hope and work for the release of all the hikers,” he said.

Earlier the lawyer acting for the hikers, Masoud Shafii, said his clients had been charged with “espionage and illegal entry”, which they “rejected”.

The three previously insisted they entered Iran by mistake after getting lost during a trek in Iraqi Kurdistan.

The hikers’ families declined to comment on the latest developments.

“The families are not making any comment at this stage,” Paul Holmes said on their behalf.

Ms Shourd’s release could ease tensions between Washington and Tehran, which have heightened in recent months over Iran’s controversial uranium enrichment programme.

Her case has highlighted deep divisions between Mr Ahmadinejad’s government and conservative-run institutions like the judiciary.

Yesterday, Mr Dolatabadi criticised the government directly, saying “releasing information on judicial cases should not be done by government officials, and judicial authorities should handle it.”

And prominent conservative lawmaker Ahmad Tavakoli hit out at Ahmadinejad directly, accusing him of pushing for Ms Shourd’s release.

“Such actions will intensify (American) pressure day by day (on Iran)... This move by Mr President is also an insult to the Iranian nation,” he told Fars news agency.

“Internally, such behaviour by the government... will be read as humiliation for the judicial branch and will question its independence.”

Mr Dolatabadi reiterated the three Americans were engaged in espionage.

“The case is nearly complete and the judge has issued an indictment for the three Americans accused of spying,” he said, adding Mr Bauer and Mr Fattal, both aged 28, had been remanded in custody.

“It has been proven that they illegally entered through the Kurdistan border. Also the equipment and supplies they were carrying are only used for spying,” Mehr news agency quoted Mr Dolatabadi as saying.