updated 5/4/2005 9:58:57 PM ET 2005-05-05T01:58:57

The Mexican government dropped a controversial land dispute case against the capital’s leftist mayor on Wednesday, ending a battle that had threatened to knock the most-popular candidate out of the 2006 presidential case.

Prosecutors said the case against Mayor Andres Manuel Lopez Obrador — which sparked massive protests — was dismissed because the legal code laid out no specific punishment for the mayor’s alleged offense.

Lopez Obrador had fought the investigation with protests and speeches, and accused the government of using the charges to keep him out of the presidential race, allegations President Vicente Fox denied. Under most interpretations of Mexican law, anyone facing criminal charges cannot run for office.

The mayor welcomed Wednesday’s decision, but said officials only stepped back after the case had brought the country to the brink of chaos.

‘That would have damaged the country’
“We have to celebrate this change of course, we were reaching the brink, we were at the point of falling into a state of political instability,” Lopez Obrador told a local radio station. “That would have damaged the country, so it’s good they made a correction.”

Lopez Obrador said that protests — like the march of hundreds of thousands of his supporters in Mexico City on April 24, or the lone individuals who confronted Fox at several public events — forced the government to drop the case.

“This isn’t our victory, we can’t give ourselves any medals, this is a victory of the people, who changed the course of politics by protesting peacefully,” the mayor said.

Speaking to reporters in Jamaica, where he was on an official visit, Fox said the decision was a bid to “remove obstacles to dialogue and open up space for a legitimate, clean election, truly fair play. We’re living up to that.”

Political scientist Federico Estevez said it was a case of “unconditional surrender” by Fox, who appeared worried the case might tarnish his political legacy. “It had nothing whatever to do with the rule of law. It was obvious by this stage of the game.”

Lopez Obrador the front-runner in polls
Most polls show Lopez Obrador — a fiery leftist known for his handout programs — as a clear presidential front-runner ahead of next year’s elections. Fox cannot seek another term.

Prosecutors alleged the mayor was slow to obey a court order to stop building a road on contested land.

As Lopez Obrador pointed out, the legal basis for dismissing the charge — that with no punishment specified, no trial was possible — was a position that his supporters and outside legal experts had maintained for months.

By suddenly adopting that point of view after months of dismissing it, the government appeared to bowing to political pressure.

Amid the public battle between Lopez Obrador and Fox, federal Attorney General Rafael Macedo de la Concha resigned suddenly, and was replaced by former law professor Daniel Cabeza de Vaca.

Fox told Cabeza de Vaca to carry out an “exhaustive review” of the investigation, and two days after taking office, the new attorney general dropped the case. Fox and Lopez Obrador are scheduled to meet Friday, for what is widely expected to be a reconciliation session.

Face-saving exit
Political columnist Miguel Angel Granados Chapa said the decision represented a face-saving exit for prosecutors, who could say a crime had been committed, but could not be punished because of a defect in the legal codes.

The Attorney General’s Office said in a Wednesday statement that “while the commission of the crime and Andres Manuel Lopez Obrador’s responsibility in that crime were established, there is at present no stated penalty applicable to the case.”

“This was a decision that should have been taken a year ago, and it would saved us all a lot of complications,” Granados Chapa told a local radio station.

Congress had stripped Lopez Obrador of the immunity from prosecution he enjoyed as a public official, a process similar to impeachment.

Fox’s spokesman, Ruben Aguilar, said the president would propose two legal changes to avoid similar problems in the future; the first would establish sanctions for officials who ignore court orders, and the second would ban people from running for public office only after they had been convicted of a crime, rather than when they were just charged.

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