With the sex assault case against Dominique Strauss-Kahn hanging by a thread, damning new revelations emerged yesterday about his accuser whose mounting credibility problems prompted the former IMF chief’s release from house arrest.

Buoyed by a New York judge’s order a day earlier to end all restrictions on him except foreign travel, Strauss-Kahn was enjoying his first full day of freedom – as prosecutors scrambled to salvage some sort of case against the once-high-flying French politician.

While the charges against Strauss-Kahn stand, the case has nearly imploded in the wake of investigations of the Guinea-born hotel maid who accused him of assault, with the discoveries leading prosecutors to acknowledge she lied to a grand jury about the case.

In a letter to defence lawyers, Manhattan District Attorney Cyrus Vance said the woman had provided a “false” narrative of her life – including a gang rape which she later admitted never occurred – as part of her application process for US asylum.

Among other details gleaned about the maid were her possible links to criminal activities, including drug dealing and money laundering, a law enforcement official told The New York Times.

Within a day of the alleged rape attempt, the maid was recorded speaking on the phone with a boyfriend jailed for possessing 180 kilograms of marijuana and discussing the benefits of pursuing charges, according to the newspaper.

When the conversation was translated from Fulani, the maid’s native language, investigators became concerned.

“She says words to the effect of, ‘Don’t worry, this guy has a lot of money. I know what I’m doing,’” the Times quotes one of the officials as saying. The paper said the man was one of several individuals had who made multiple cash deposits, totalling around $100,000, into the woman’s bank account over the last two years.

The sensational twist raised hopes among Stauss-Kahn’s ardent supporters that the case will collapse and the Socialist party favourite will return to frontline politics, possibly even as a candidate to challenge French President Nicolas Sarkozy in 2012 elections.

A smiling Strauss-Kahn, 62, appeared as if a large weight had been lifted off his shoulders as he left the packed Manhattan courtroom last Friday.

He quickly took advantage of his newfound freedom that evening, dining with his wife and another couple at an upscale Italian restaurant on Manhattan’s Upper East Side.

Strauss-Kahn dined on pasta pappardelle with truffles, and the tab ran to around $600, according to the restaurant owner.

It was a stunning reversal of fortune for a man who spent days locked up in New York’s tough Rikers Island jail last May.

Strauss-Kahn, whose $1 million bail and $5 million bond will now be returned, is free to travel anywhere in the US – though authorities will keep his passport pending possible trial – and the restrictive bail conditions, including wearing an ankle monitor, were lifted.

According to the accuser’s initial grand jury testimony, she fled Strauss-Kahn’s luxury hotel suite immediately after the May 14 attack and waited in the hallway before informing a supervisor.

But, prosecutors revealed, the 32-year-old subsequently chang­ed her story, admitting she actually cleaned another room and even returned to start cleaning Strauss-Kahn’s suite before alerting her bosses.

Strauss-Kahn’s attorneys William Taylor and Benjamin Brafman said the disclosures “only further confirm that he will be fully exonerated”.

Despite the maid’s shattered credibility, Vance vowed to continue the investigations until prosecutors had uncovered all the facts.

“Today’s proceedings did not dismiss the indictment or any of the charges against the defendant,” he stressed.

Judge Michael Obus concurred, telling the court: “The case is not over.... In the meantime, there will be no rush to judgment.”

But many legal analysts, including Jeffrey Toobin, a res­pected lawyer who has written about the US Supreme Court and major trials including O.J. Simpson’s, said the case was likely dead in the water.

“It looks like this case is going to end with a dismissal,” Toobin told CNN.

“It’s hard to imagine how there could be a trial at this point when the prosecution has essentially described its main witness as something close to a compulsive liar.”

Strauss-Kahn, who resigned from his high-profile post at the International Monetary Fund to fight the charges, is next due in court on July 18.

Outside the courtroom, the maid’s lawyer Kenneth Thompson admitted his client had made “some mistakes,” but insisted forensic evidence would prove Strauss-Kahn was guilty of a brutal sexual assault.

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