Two British law graduates held in Brazil for insurance fraud were acquitted after a successful appeal, their lawyer said today.

Shanti Andrews and Rebecca Turner, both 23, were arrested in July after telling police they had been robbed while backpacking.

Miss Andrews, from Frant, near Tunbridge Wells, Kent, and Miss Turner, from Woolton Hill, near Newbury, Berkshire, pleaded guilty to attempted insurance fraud and were sentenced to 16 months in prison.

A judge later converted the punishment to a community service penalty.

Lawyers for the two University of Sussex graduates, who have been staying in an apartment in Rio de Janeiro, lodged an appeal in August when two further charges were added.

Brazil's High Court in Brasilia yesterday found police had obtained information to secure their arrest illegally and overturned the convictions, according to lawyer Renato Tonini.

He said: "They were acquitted on every charge.

"The police did not observe the rules under Brazilian law to go into somebody's room.

"They did not have an order from the judge to go into the room.

"The High Court recognised this and decided to acquit."

Mr Tonini said the women's passports had been returned and they were now free to leave Brazil, although he did not know when they would return to the UK.

Their mothers travelled to Rio to be with them for the appeal, he said.

Asked how Miss Andrews and Miss Turner had reacted to the decision, Mr Tonini said: "They are obviously very happy.

"They could not believe it happened like this."

The women were arrested on July 26 after telling police that belongings totalling about £1,000 were stolen during a bus journey while they were on a nine-month world tour.

They were taken into custody but were freed on bail a week later after their lawyer appealed against a judge's initial decision to refuse them bail After they were held by police, Miss Andrews's mother, Simone Headley, said the two friends were traumatised by their ordeal and that it had been a "misunderstanding" at the end of their trip.

Mr Tonini said that if their appeal had failed they could have faced having to carry out community service in a hospital or an institution for the poor.

A spokeswoman for the Foreign and Commonwealth Office said: "We can confirm that Rebecca Turner and Shanti Andrews have been released from their sentence.

"We understand arrangements are being made for their return to the UK."