MEXICO CITY (AP) _ The Mexican government said Wednesday it was dropping a land expropriation case against popular Mexico City Mayor Andres Manuel Lopez Obrador, clearing the way for the fiery leftist politician to pursue his presidential bid.

Lopez Obrador had fought the investigation with protests and speeches accusing the government using the charges as a pretext to keep him out of the presidential race _ allegations President Vicente Fox denied. Under most interpretations of Mexican law, anyone facing criminal charges cannot run for office.

In a statement Wednesday, the federal attorney general's office said it wouldn't pursue the investigation of the Mexico City mayor because the law didn't state clearly what sentence he might face if convicted.

Most polls show Lopez Obrador _ a leftist known for his handout programs _ as a clear presidential front-runner ahead of 2006 elections. Fox cannot seek another term.

The action came a week after Fox accepted the resignation of former Attorney General Rafael Macedo de la Concha, replacing him with a new attorney general whose first task was to review the case against Lopez Obrador.

The attorney general's office had sought to prosecute Lopez Obrador on charges he failed to obey a judge's order to stop building a hospital access road on private land.

Congress had stripped Lopez Obrador of the immunity from prosecution he enjoyed as a public official, in a process similar to impeachment.

The announcement came as the mayor and Fox are planning to meet on Friday, an encounter seen as a gesture of reconciliation after weeks of public bickering.

Former law professor Daniel Cabeza de Vaca was sworn in the week as attorney general, replacing Macedo, who won praise for jailing prominent drug traffickers but came under intense public criticism for his handling of the criminal investigation against Lopez Obrador.