Talamoni's arrest sparked outrage among Corsican nationalists

Jean-Guy Talamoni, 43, is being investigated for "extortion of funds in connection with terrorist activities".

Mr Talamoni is head of the pro-independence Unione nazionale party in Corsica's regional assembly. He denies any wrongdoing.

He was released on Sunday. His arrest three days earlier had sparked protests on the troubled Mediterranean island.

Mr Talamoni was detained in connection with the suspected racketeering of the leading French travel agent Nouvelles Frontieres.

In the early 1990s the company was allegedly forced to buy expensive advertisements in the Corsican nationalist weekly U Ribumbu.

The authorities suspect that this was an attempt to channel money to nationalist groups.

On Saturday police used teargas to disperse demonstrators in the northern Corsican city of Bastia who were calling for Mr Talamoni's release.

Corsica remains a major holiday destination, despite sporadic nationalist violence over the past two decades.

Attacks against government offices and villas belonging to non-Corsicans picked up last year, following the arrest of the chief suspect in the 1998 killing of the French government's top official on the island.