Azath Sally, 49, the former deputy mayor of Colombo, was arrested on Sunday in what the minority Muslim community described as the latest attack on them in the Buddhist-dominated island nation.
Sally, leader of the Muslim National Unity Alliance, was released yesterday after authorities revoked a 90-day detention ordered by President Mahinda Rajapaksa, who is also the minister of defence, his lawyer Shiraz Noordeen said.
"No charges have been pressed and he was released after negotiations with the defence ministry," Noordeen told AFP.
"They released me because of the tremendous international and local pressure on the government," Sally told AFP from his hospital bed where he was being treated for dehydration.
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The United States, which moved a censure motion against Sri Lanka at the March UN Human Rights Council sessions in Geneva, had asked Colombo to ensure the opposition leader had access to lawyers.
Local media reports quoted unnamed officials as saying Sally was accused of inciting Muslims to take up arms against the state -- a claim he strongly denied.
The Muslim Council of Sri Lanka (MCSL), an umbrella organisation of Muslim groups, said Sally's release could help defuse religious tensions.
Sally had blamed authorities for turning a blind eye to an anti-Muslim campaign that culminated in an arson attack on two Muslim-owned businesses -- a clothing store and a vehicle yard -- in March.
Three Buddhist monks and 14 other Buddhists arrested over the attacks were later freed after the police and the victims did not press charges.