Former Pendle Council candidate Mr Peter Hill (23), of Keighley Road, Colne, said his world had been on hold since November, when he was arrested in an MI5 sting operation on suspicion of spying for the Russian intelligence services.

The Official Secrets Act charge was dropped in January, but Mr Hill was due to appear in court on April 7th to face allegations of possessing potentially-explosive substances - found when officers raided his Skipton home after his arrest.

But the Crown Prosecution Service said the case had been withdrawn because there was no realistic prospect of a conviction.

The former Park High School pupil and Territorial Army officer cadet, who lost his job and his home as a result of the charges, said the substances found were ordinary quantities of weed killer and household sugar.

He said: "I always knew it would be sorted out because I was innocent. But the nearer the trial date got, the larger the prospect of 14 years in prison loomed.

"My solicitor told me the good news on Monday. I was bouncing around the room. It's a huge relief, now I've got to slowly start picking up the pieces of my life."

After initially spending five days in custody, he was bailed and ordered to sign in at Colne Police Station three times a week.

Mr Hill said he was looking forward to his computer, mobile phone and other personal belongings being returned. He wants to get back to work and pick up his studies, and seek redress for his ordeal.

"I was unemployed and unemployable for six months," he said. "All the uncertainty has been so stressful - not just for me, but for my family and friends, who were very supportive.

"I've not had an apology or any contact from MI5 or the authorities whatsoever."

Mr Hill, who was working as a risk analyst in Skipton at the time of his arrest, said he had been tempted by the prospect of making some easy money to help pay off his student debts.

He had been contacted by a man posing as a Russian agent, offering him £6,000 for documents.

"I knew that, although these documents were restricted, they were still in the public domain and that I could buy them from the Internet for £2.99," said Mr Hill.

"It doesn't sound good, but I talked myself up because I saw the chance to make some easy money. I don't know why anyone would want to set me up, but I was naive enough to fall for it."