Sweden releases suspected spy from custody

STOCKHOLM (Reuters) - Swedish authorities have released from custody a person detained on Sunday on suspicion of espionage, the prosecution agency said on Wednesday.

"There are no longer grounds for the person to be detained," Prosecutor Per Lindqvist said in a statement, adding that the investigation was however still ongoing.

Public broadcaster SVT on Tuesday reported, citing unidentified sources, that a Swedish diplomat had been apprehended on suspicion of espionage.

The lawyer appointed to defend the person said on Tuesday his client denied wrongdoing.

Swedish authorities have fretted in recent years about increasing threats from both foreign powers like Russia, China and Iran and groups engaging in actions ranging from violent attacks and hybrid warfare to corporate espionage.

In March, SAPO warned that foreign powers are operating in ways that threaten security, using hybrid activities to destabilise Sweden and Europe.

(Reporting by Anna Ringstrom, editing by Ros Russell)