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Golunov, a 36-year-old journalist known for exposing corruption among Moscow city officials, was detained by police last Thursday and accused of dealing drugs, an allegation he flatly denied.
Russian journalists critical of authorities have led a dangerous existence since the 1990s - sometimes threatened, physically attacked, and even murdered for their work.
But the crude way supporters said Golunov was set up and detained triggered an unusual show of media unity and an uncharacteristically swift response from authorities nervous about social unrest at a time when President Vladimir Putin already faces disquiet over living standards.
Interior Minister Vladimir Kolokoltsev said the criminal case against Golunov was being dropped due to a lack of evidence of any wrongdoing on his part.
Golunov was freed from house arrest hours later. After having the electronic bracelet on his ankle removed, he walked out of a police station in central Moscow to be met by hundreds of journalists who applauded him.
While welcoming Golunov’s release, a spokeswoman for the European Union on foreign affairs said the trend in Russia with regard to media freedom “remains worrying”.
“Independent as well as critical voices are an essential part of any vibrant society,” Maja Kocijancic said on Twitter.
Russia ranks 149th out of 180 countries worldwide on a media freedom index compiled by Reporters Without Borders, an advocacy group.