President Rafael Correa said Monday he is pardoning Ecuador's main opposition newspaper and four of its employees, relieving them of a court's imposition of prison terms and a $42 million fine for criminal libel against Correa.

The legal attack on El Universo had prompted allegations by international press freedom and human rights groups that the leftist president is using a judiciary of dubious independence to silence critics.

Correa said in a brief televised address that he was forgiving the three-year prison terms against three executives and the former opinion page editor of El Universo, whom he sued a year ago under a criminal defamation law.

In addition, Correa said he was dropping a libel case against two other journalists who wrote a book that said companies tied to his older brother had $600 million in contracts with the Ecuadorean state but he did not act on the conflict of interest until they had revealed it publicly.

A court this month ordered the two journalists to pay Correa $1 million each.

One of the two, Juan Carlos Calderon, told reporters that Correa's pardon was the president's way of "trying to halt the enormous criticism, nationally, internationally and from his own organization."

Correa said the verdict in the El Universo case was deserved but that he decided to grant the pardon after consulting with relatives and close friends.

His foreign minister, Ricardo Patino, said El Universo's director, Carlos Perez, can now leave Panama's embassy in Quito, where Perez was given political asylum Feb. 16 when the National Court of Justice upheld the ruling against his paper.

"He's got to be told he can go home now," Patino said, adding that "there was never an arrest warrant. He makes out like he was persecuted."

Perez and the other two executives affected by the verdict, all of them brothers, will not comment until a court has ratified the nullification of the fine and prison sentence, said the Guayaquil newspaper's acting director, Nila Velasquez.

Carlos Lauria of the New York-based Committee to Protect Journalists said that while the group is relieved by Correa's decision, he "is acting more like a king instead of an elected president. Instead of using archaic and outdated laws to silence critical journalists."

He urged Correa to work with Congress "to eliminate restrictive laws so that they conform with international standards on freedom of expression."

Human Rights Watch's director for Latin America, Jose Miguel Vivanco, said the case "will certainly contribute to an environment of self-censorship" and follows a pattern of government officials using a legal system they "pretty much control" against critics, then pardoning them.

In one case, Correa's close aide Vinicio Alvarado pardoned an indigenous leader, Monica Chuji, in November after a court sentenced her to a year in prison and ordered her to pay him $100,000 for saying he belonged to Ecuador's "nouveau riche," insinuating he had enriched himself illegally.

The columnist, Emilio Palacio, called Correa's announcement a "spectacular triumph" for press freedom. He said, however, that it was too early to decide whether to abandon his request for asylum in the United States.

In the column that triggered the case, Palacio called Correa a dictator and accused him of ordering troops to "fire at will" on a hospital full of civilians during a September 2010 police revolt.

Correa, who is democratically elected and in his second term, denied issuing any such order, although one of at least five fatalities during the daylong revolt was a police officer shot to death while helping to spirit the president out of the hospital in an SUV.

In a column on the case published Sunday, Peru's Nobel Prize-winning author Mario Vargas Llosa said "no one can deny that journalism in Ecuador as in the rest of Latin America, is far from always being a paragon of integrity, balance and objectivity" and it is the job of an independent judiciary to guard against abuses.

"But decapitation is not the most appropriate remedy for headaches," he added, calling the verdict against El Universo "scandalous."

One of the judges involved in the case in its early stages, Monica Encalada, has accused a lawyer for Correa of trying to bribe her to ensure a guilty verdict against El Universo. She has sought political exile in Colombia.

Correa took office in January 2007 and won re-election in 2009 after a voter-approved constitutional reform. He has indicated he will seek a third term in 2013 elections.

With a 70 percent approval rating, the U.S. and European-trained economist is among Latin America's most popular leaders, thanks in part to an array of state-funded programs that have brought stability to a traditionally unruly nation.

Correa also has used the legislature to influence Ecuador's news media.

Last year, voters approved ballot measures he had proposed that bars news media owners from holdings in other business sectors and led to creation of a government oversight panel to regulate news media content for "excesses."

Correa also won congressional approval of a law that bars the news media from broadcasting or publishing any material that could influence opinions about candidates or proposals during election campaigns

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Associated Press writer Frank Bajak contributed to this report from Lima, Peru.