Taghavi was in the same prison as Americans Shane Bauer and Josh Fattal, who have been held for 410 days [AFP]

Iran has released an American businessman who was jailed in Tehran for more than two years on suspicion of ties to an allegedly violent opposition group, his lawyer said.

Reza Taghavi, 71, who was released on Saturday, had not been charged with a crime and denied knowingly supporting the organisation, known as Tondar.

"He admitted to nothing and he continues to maintain his innocence," Pierre Prosper, his lawyer, told the Associated Press news agency in a telephone interview from Tehran after his client's release from Evin prison.

Taghavi is not expected to return to Southern California before the middle of next week.

While Iranian officials continue to assert that Taghavi worked with the group Tondar, they are "comfortable that he does not pose a threat to them and that he can leave and go back to the United States," Prosper said.

Iran had accused Taghavi of passing $200 in cash to an Iranian man tied to Tondar.

Humanitarian grounds

Taghavi, who regularly visits Iran to conduct business and see family, had received the money from a friend in California with instructions to pass the cash to an Iranian, according to Prosper.

"I didn't do anything wrong. Someone just asked me take this money to help someone," Taghavi told ABC News.

"Sometimes I feel relief, sometimes, I feel angry. What happened? Two-and-a-half years for what?" he said.

His family had said he has diabetes and was in poor health, and his lawyer had asked Iran to free him on humanitarian grounds.

But a family representative said Iranian officials did not give a reason for letting Taghavi go.

Prosper said Taghavi won't be able to leave until this coming week because of conditions attached to his release. While Taghavi never was charged formally or presented with paperwork indicating a charge, Prosper said there is a case within the Iranian justice system.

He plans to meet with a judge in the next week in hopes of getting that case dismissed.

The best way to describe the situation, the lawyer said, is that the case is suspended and Taghavi is free to leave.

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Prosper said he and Taghavi will visit the southern Iranian city of Shiraz, site of an April 2008 bombing at a mosque that killed 14 people.

Iranian authorities blame the group that Taghavi is suspected of being involved with, and told Taghavi to meet with victims of the attack.

"He feels aggrieved. He feels used" by his friend back home who provided the cash, Prosper said.

Prosper had five direct meetings with Iranian officials since Taghavi was jailed. Three were in Iran, one in New York and one in Europe.

Taghavi shared a 16-bed cell with 33 inmates in the same prison as Josh Fattal and Shane Bauer - two of the three Americans detained while hiking in the mountains on the border with Iraqi Kurdistan.

On Monday, the two men will have been in jail for 444 days, matching the time the US embassy
hostages were held in Iran from 1979 to 1981.

Iran's intelligence minister said there were no plans to release the Fattal and Bauer, state media reported on Friday.

Source: Agencies