The wife of deposed Egyptian leader Hosni Mubarak has turned over her property and funds to the state, the state news agency reported today.

Mubarak and his wife Suzanne have been questioned about their financial dealings. Some estimates put Mubarak's holdings in the tens of billions of dollars.

Ms Mubarak, 70, has been in hospital after an order to detain her. Her husband, 83, who was deposed on February 11, is also in the hospital.

The news agency said her domestic assets were worth three million dollars. Her agreement could lead to dropping the investigation into their finances.

A government official said the case against her has not yet been closed, although her detention order may be reconsidered.

He spoke on condition of anonymity because he was not authorised to release information.

By relinquishing her claims to the assets, Ms Mubarak is benefiting from articles in the law which allow those accused of making illegal gains of giving them up in exchange for dropping the investigation, said lawyer Nasser Amin.

The move could open the way for others who are in detention on accusations of abusing their powers to settle with the state by returning their money.

Mubarak himself is under detention for investigation into his financial dealings. He is also facing allegations that he ordered the a violent crackdown against protesters.

A prosecution official said the investigation by anti-corruption prosecutors disclosed that Ms Mubarak had about three million US dollars in bank accounts in Egypt and owned a villa in the suburb where she and her husband lived. It was not clear how much money the Mubaraks had abroad.

Mr Amin said the settlement was clearly a "compromise" to let the former first lady go free, while her children and husband remain under detention, and to meet one of the demands of the revolutionaries, which is to retrieve wasted money.

He said not everyone would be pleased: "The decision may not be accepted by society, who after a revolution, side with the idea of revenge. But from the legal point of view, this is in line."

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