Charges against the man leading an investigation into alleged corruption by South Africa's police chief Jackie Selebi have been dropped, SAPA news agency reported.

SAPA said charges against Gerrie Nel, a senior official of the Scorpions elite crime-fighting unit who was arrested last week, had been dropped.

Nel had been charged with perjury, fraud and "defeating the ends of justice".

Prosecutors have said they will charge Selebi with corruption, and the police chief was put on extended leave by President Thabo Mbeki on Saturday. Selebi resigned as president of international police body Interpol a day later.

Corruption allegations are explosive in South Africa, where Mbeki and his rival Jacob Zuma - new leader of the ruling African National Congress - are locked in a power struggle that has raised investors' fears of political instability.

The National Prosecuting Authority (NPA), which oversees the Scorpions, has also charged Zuma with corruption, fraud, money laundering and racketeering. He is due to stand trial in August.