The US Government has decided not to pursue a Canadian consultant in Bermuda accused of alleged multi-million dollar white collar crimes.

But it is understood the US will bid to have Lawrence William Anderson -- a former Bermuda Government consultant -- extradited from Canada, after he returns there today.

US authorities dropped the request for extradition late on Friday, following a two-and-a-half day Magistrates' Court hearing. US Consul Sylvia Hammond confirmed the proceedings had been discontinued but couldn't confirm what the next action would be.

It is not known why the US dropped the matter in Bermuda.

Peter Eccles, representing the Attorney General's Chambers, said it was the end of the matter as far as Bermuda was concerned, unless Mr. Anderson, 61, returned to the Island.

Mr. Anderson's lawyer, Saul Froomkin, refused to comment on the matter.

US prosecutors started proceedings against Mr. Anderson in March as they probed an alleged $26 million fraud network that stretched from the US to the Cayman Islands and Hong Kong.

Employed as an education and tourism management advisor to the Bermuda Government Department of Management Services, he was arrested and later released on $25,000 bail, pending a a preliminary hearing.

His five-month contract was completed in April but he was not allowed to leave the Island until the matter was resolved.

US prosecutors in Michigan alleged loans were obtained by five defendants from several banks, secured on assets that did not exist or did not exist in the form claimed by the defendants.

The charges, which span 1982 to 1991, involve fraud, false statements, conspiracy and money laundering.

The Bermuda Government was not aware of the criminal proceedings at the time and said it would not terminate Mr. Anderson's contract as a result of the case.