The lifting of the travel ban comes one day after the judges on the case resigned [AFP]

Egypt has lifted a travel ban on the defendants in a trial of 43 NGO workers charged with using illegal foreign funds to foment unrest in the country in a case that has tested relations with Washington, prosecution sources say.

A lawyer for some of the defendants said on Wednesday he had been informed that the ban had been lifted but that the defendants would have to post bail of two million Egyptian pounds (roughly $330,000).

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"The assistant to the attorney general, following a request from the investigating judges, has issued an order to lift the ban," a judicial source close to the proceedings told the Reuters news agency.

The source said the charges had not been dropped against any of those involved, who include 16 US citizens, 16 Egyptians and German, Palestinian, Serbian and Jordanian citizens.

Judge Abdel Moez Ibrahim, head of the Cairo appeals court who appoints judges to the case, also confirmed to Reuters that a decision had been taken to lift the travel ban on all the foreign defendants.

All three of the judges in the trial resigned from the case on Tuesday, with Mohammed Shoukry, the lead judge in the case, saying the court felt "uneasiness" in handling the case, according to a court official.

Only seven of the US citizens accused in the case are still in Egypt as the rest had left the country before charges were filed.

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Hillary Clinton, the US secretary of state, said on Wednesday she expected the row over the activities of on-governmental organisations (NGOs) to be resolved "in the very near future".

The case has brought relations between Egypt and the US to their lowest levels in three decades.

US politicians have said they may cut off Egypt's $1.3bn in annual military aid if the US citizens are tried.

'Illegal use of funds'

The activists have been charged with the illegal use of foreign funds to foment unrest and operating without a licence.

However, the investigation fits into a broader campaign by Egypt's rulers against alleged foreign influence since the fall of Hosni Mubarak last year.

Rights groups have sharply criticised the investigation into the groups and the charges, saying they are part of an orchestrated effort by Egyptian authorities to silence groups critical of the military rulers.

"Of course this trial is politicised. We proved during the investigation that we didn't do anything," one of the defendants, Islam Shafiq, told AFP after the trial opened on Sunday.

Shafiq works as a financial manager with the US-based International Centre for Journalists.

Egyptian officials have said the trial has nothing to do with the government and is in the judiciary's hands.

Egyptian officials have blamed continuing unrest in their country on foreign interference they attribute, in part, to the organisations.

Source: Agencies