Tsvetan Mirchev, the former head of the Burgas water utility, will stay under house arrest after a Burgas court rejected prosecutors' request to hold him in custody.
Prosecutors based the request on claims that Mirchev threatened a witness in the case. They say he phoned the witness through an internet app, from a US number and with a disguised voice, and told him to withdraw his testimony.
Deputy regional prosecutor Miroslav Iliev said the threats made the witness afraid. He said the message was that the witness should withdraw his statement or give one that clears Mirchev, or else watch how he moves around and think of his family.
The court said the evidence of threats was not enough. It also said there was no sign that Mirchev had broken the terms of his house arrest.
Mirchev denied the charges. He said he does not know the witness and has never heard of him, and called the claims about a call from a US number and a recognised voice absurd. Police seized six mobile phones when they searched his home, but none had a US SIM card.
Mirchev, Hristo Shirokov, the regional head of the DPS party, and others are charged in the case with taking part in an organised criminal group. The case involves a scheme in which water meters at hotels on the southern Black Sea coast were tampered with. They also face a charge of wilful mismanagement.
Experts have been appointed to examine the case, and their findings are due.