In a serious defeat for the Clinton administration, the Taiwan-born nuclear scientist Wen Ho Lee was set to be released from prison yesterday after agreeing to plead guilty to one of the 59 charges he faced. All the others were dropped.

In a serious defeat for the Clinton administration, the Taiwan-born nuclear scientist Wen Ho Lee was set to be released from prison yesterday after agreeing to plead guilty to one of the 59 charges he faced. All the others were dropped.

Mr Lee, 60, arrested in December on suspicion of betraying nuclear secrets to China, had been in solitary confinement in a New Mexico prison. Family and friends who put up the $1m (£724,000) bail initially demanded were on hand to cheer him to the family home near Los Alamos and the National Laboratory where he worked.

Two weeks ago the judge, professing misgivings about government evidence, agreed to bail Mr Lee on conditions tantamount to house arrest. Government lawyers appealed and Mr Lee remained in prison pending a bail hearing scheduled for yesterday. As late as last week prosecutors said he was too big a threat to national security to be released, even on the conditions proposed.

By Sunday, however, they settled for the only compromise on offer. Mr Lee agreed to plead guilty to one charge of improperly downloading classified material on to an unsecure computer and would be sentenced to "time served". Yesterday's bail appeal hearing was cancelled.

In recent weeks the government case suffered a number of setbacks. Mr Lee, it emerged, passed a lie-detector test federal agents said he failed; documents showed he complied with regulations in disclosing meetings with Chinese scientists; and an FBI officer retracted a charge that he had been "deceptive" about the downloading of data. A colleague also cast doubt on the value of the material he downloaded, saying 99 per cent, if not all of it, was already in the public domain.

Mr Lee's supporters said he was singled out because of his Asian origins. There was evidence that others at Los Alamos and elsewhere, including John Deutch, a former CIA head, had exchanged data between secure and non-secure computers with impunity.

Whether Mr Lee's ethnicity played a role in the government's decision to prosecute will be just one of many questions that will be asked in the far-reaching inquest that has already begun.