Please convey to the Chinese people and to the family of pilot Wang Wei that we are very sorry for their loss

Xinhua quoting the US letter of apology

A statement read on television and radio said the crew would be able to go after what it called "necessary formalities" had been completed.

The 24 crew members have been detained on the island of Hainan since their plane and a Chinese fighter jet collided 11 days ago.

The Chinese state news agency reported that their release followed the delivery of a letter to the Chinese foreign ministry from the American ambassador, in which the US Government said it was "very sorry" about the incident.

On Wednesday, there were increasing signs that both sides in the dispute appeared to be edging towards resolution.

US State Department officials said that in a draft document offered to Beijing, the US expressed regret for landing on Chinese soil without permission.

Meanwhile, China's state-run media began reporting comments made by US Secretary of State Colin Powell three days ago, in which he expressed sorrow for last week's collision.

'Sincere apology'

The Chinese news agency, Xinhua, reported that the US letter read: "Both President Bush and Secretary of State Powell have expressed their sincere regret over your missing pilot and aircraft.

Foreign Minister Tang Jiaxuan said the release of the crew was a humanitarian gesture

"Please convey to the Chinese people and to the family of pilot Wang Wei that we are very sorry for their loss," the letter said, according to Xinhua.

The apology added that the Washington was sorry that the plane entered China's airspace and landed without a verbal clearance.

Background diplomacy

China's evening television news quoted Foreign Minister Tang Jiaxuan as saying the release of the crew was being made as a humanitarian gesture, and repeating the mid-air collision was the responsibility of the US.

This is unlikely to be the end of the dispute. There is no mention in the Chinese statements about the spy plane itself.

Chinese pilot Wang Wei has been lionised by the state media

Correspondents say that there is likely to be some background diplomacy and hard bargaining going on as the US crew are released.

They say China is likely to press hard for restrictions on US surveillance flights over or near Chinese territory.

Beijing is also likely to pressure the US on bilateral concerns such as trade and entry to the World Trade Organisation.

Preparing public opinion

The change in the character of the Chinese media reporting, correspondents say, was preparing public opinion for an announcement that a deal to return the crew of the US spy plane had been reached.

President Bush: The US maintains the collision was not its fault

The two sides had been locked in a diplomatic deadlock, with Washington holding back from meeting Beijing demands for an outright apology.

But US officials have refused to apologise outright because they do not believe the collision was their fault. The US also maintains that the accident occurred in international airspace.

Sense of outrage

Correspondents say the precise wording, and the extent of regret, offered by the US in writing was crucial because Chinese leaders needed something to show the public, whose sense of outrage over the incident has been heightened by anti-US rhetoric in state media.

They also say Chinese officials appear to be preparing to announce the death of the missing airman, Wang Wei.

The announcement of the pilot's death and the abandonment of a massive search for him is being seen as a vital part of bringing this dispute towards a conclusion.

State media have lionised the pilot as a patriot who crashed defending his country. Reports say more than 1,000 military and civilian vessels have joined the search for him.