Officers in east China's Zhejiang Province will offer a face-to-face apology to a reporter whom they wrongly listed as a wanted suspect for his reporting on a local company's alleged insider trading.

However, police said earlier yesterday that the investigation into allegations of defamation against Shanghai-based journalist Qiu Ziming and his newspaper, the weekly Economic Observer, would continue, according to Xinhua news agency.

"The Lishui City police will continue to investigate the case and responsibility will be clarified after further investigation," said Chen Zhong, director of Lishui Public Security Bureau, as quoted by Xinhua.

The police department in Suichang County in Zhejiang announced on Tuesday that they started a nationwide manhunt for the reporter for ruining the reputation of Zhejiang Kan Specialty Material Co Ltd.

The detention warrant for Qiu was scrapped on Thursday.

The 28-year-old Qiu told Xinhua that he had not slept for days because of the threat.

He said his series of negative reports on Zhejiang Kan since May were all based on solid evidence.

In Qiu's stories, he accused the company of using its local political connections to buy state property worth 600 million yuan (US$88.5 million) with only 890,000 yuan.

Zhejiang Kan suspended public trading on June 7 after Qiu's stories were published. The company reported to police, accusing Qiu of defaming it with fabricated reports.

Suichang police issued the detention warrant citing Qiu's articles.

The case aroused a nationwide uproar calling for the protection of investigative reporters in China.

The General Administration of Press and Publication said yesterday they had stepped in to investigate the case.

The GAPP and the Chinese Association of Journalists said they will definitely support Qiu and his newspaper if his reports were not problematic. The GAPP said media supervision of listed companies must be protected and encouraged.

Qiu has garnered vast support from the Internet. A survey conducted by sina.com.cn showed that 89 percent of all 116,541 voters regard the arrest warrant against Qiu as illegal.

"Qiu's case would be milestone in the protection of Chinese journalists' rights," said Wang Shengzhong, deputy chief editor of the newspaper.