The Bangladesh government ordered criminal cases be dropped against top union leaders on Wednesday, a ministry official said, a move hailed by labour activists who say they are routinely harassed and threatened.

A home ministry official told AFP that the cases of inciting violence during wage-hike protests in 2010 against Kalpona Akter and Babul Akter, the leaders of Bangladesh Center for Worker Solidarity (BCWS), will be withdrawn.

"The home minister has already directed police and the district administration to withdraw the cases," said Kamaluddin Ahmed, a senior home ministry official, explaining that "the government took generous views of the cases".

Kalpona was facing five cases and Babul six.

The official did not cite any reason, but leading Bengali daily Prothom Alo quoted home minister Muhiuddin Khan as saying the aim was to "win back" duty-free access the US had accorded some of Bangladesh's products.

The US suspended the Generalized System of Preferences (GSP) in late June over Bangladesh's failure to protect the fundamental rights of workers, a decision hastened by the death of 1,129 people in the collapse of a garment factory complex in April.

The disaster outside Dhaka highlighted appalling working conditions in Bangladesh's 4,500 garment factories where more than three million workers make clothing for top retailers such as Wal-Mart, H&M for a basic monthly wages of $40.

Although the GSP programme does not cover the garment industry, the move was an embarrassment for the Bangladeshi government which is desperate to convince foreign firms that it is serious about improving safety.

Bangladesh initially reacted with fury to the announcement by President Barack Obama but later announced a series of moves to amend labour laws in an effort to ensure trade union rights and workplace safety.

BCWS executive director Kalpona Akter welcomed the decision, but said the government could have dropped the cases much earlier.

"The cases were filed in 2010 when we were waging protests to raise worker salaries. They were lodged to harass us," Akter told AFP, adding several labour leaders including herself were detained at that time.

"My colleague Babul Akter was severely beaten at Ashulia police station and threatened to be killed in a staged encounter," she said, referring to the industrial area where most of Bangladesh's top factories are located.

Another BCWS leader was murdered in 2012 but there has been no progress in the case. Union leaders have pointed the finger at a top security agency for the murder -- allegations that officials have denied.