Indonesia dropped corruption charges against former strongman Suharto on Friday, disappointing those who struggled against his repressive rule and had long hoped to see him brought to justice.

Suharto was ousted after 32 years in 1998 amid student protests and nationwide riots. In 2000, prosecutors charged him with embezzling $600 million, but he never saw the inside of court after his lawyers argued that a series of strokes had left him with irreparable brain damage.

Suharto, whose regime was widely regarded as one of most corrupt and brutal of the 20th century, still has many powerful supporters in the government, parliament and military who want his name cleared.

"Suharto is no longer a defendant, he is a free man," said Attorney General Abdul Rahman Saleh.

CountryWatch:Indonesia

Rahman indicated Suharto's poor health was behind the decision to drop the charges. Suharto, 84, is hospitalized in Jakarta, having undergone colon surgery last weekend.

"Our conclusion, after hearing the statement from the doctors, is that Suharto's condition is getting worse," Rahman said in his announcement.

However he said the case could be reopened if there were "new developments," suggesting Suharto could still be tried if his health improves.

Rahman's announcement came just hours after Indonesia's president said he decided not to drop the case, citing what he said was public anger over the proposed move.

"The waves of opposing and supporting voices are getting higher and this could lead to conflict," President Susilo Bambang Yudhoyono told a news conference.

On Thursday, State Secretary Yusril Ihza Mahendra, appointed by Yudhoyono to investigate the Suharto case, said the government intended to drop charges and take steps to "rehabilitate" his name.

The move has been front page news in Indonesia and has drawn much editorial comment, but there have been no large demonstrations. A few dozen protesters gathered outside Suharto's home Friday, but no incidents were reported.

Suharto's critics say the $600 million represents only a small fraction of the money he and his family stole.

They also say Suharto should be charged in connection with at least 500,000 political killings during his regime, mostly of communists and left-wing government opponents.

Some have called for Suharto to apologize to the nation, or return money he allegedly stole, in exchange for the case being dropped. Others allege that he is feigning illness, and should be brought to trial or tried in absentsia.

Doctors say Suharto — who has been hospitalized at least four times since 1998 — is weak, but recovering well from his latest operation, performed after he was diagnosed with intestinal bleeding.

Suharto has kept a low profile since his ouster.