Peter Foster, the Australian conman who once advised Cherie Blair on a property deal, has struck a deal with leaders of Fiji’s military coup and has walked free from house arrest.

Foster, who faced fraud charges in the island state in the South Pacific, is believed to have returned to a luxury villa he is renting at an exclusive resort.

He checked out of the upmarket "JJ’s" on the Park Hotel in Suva, the capital, at the weekend and failed to attend a scheduled court appearance on Monday.

However, a warrant for his arrest was stayed after the magistrate was told by military authorities that Foster had agreed to name corrupt officials in the government of Laisenia Qarase, the former Prime Minister, who was overthrown in a military coup on November 5.

Foster was facing charges of using forged documents to obtain a work permit and business licence in Fiji. Allegations that he tried to discredit a rival Fiji resort project by portraying it as a haven for paedophiles were also being investigated.

Yesterday a senior legal official, who did not wish to be named, disclosed that John Semisi, the magistrate dealing with Foster’s case, was approached by military authorities on Saturday requesting a change to the conditions upon which Foster had been released on bail.

Mr Semisi was told that Foster had agreed to assist the ruling Fijian military by naming corrupt officials in Mr Qarase’s government.

In return, Foster would be allowed to visit his elderly mother, staying with his sister at their rented home within the exclusive Denarau Island resort, in the west of Fiji.

Foster, speaking from Denarau Island on Monday, told Fijian media that he was forced to leave the hotel.

"I had no choice," he said. "Four officers came to the hotel about 6 pm and escorted me to Nadi."

The army has denied involvement but a Fijian police spokesman said Fiji’s police tactical response group was dealing with Foster’s security.

Foster, who has been described as "Australia’s greatest conman" was arrested in Fiji on October 25 following a police chase in which he stripped off his clothes and attempted to evade capture by diving off a bridge. He gashed his head, was admitted to hospital and began a hunger strike, alleging police brutality.

He has previously been jailed in Australia, Britain and the United States, for offences that have included hawking dubious slimming remedies.

He achieved notoriety in Britain in 2002 when he brought two flats on behalf of Cherie Blair who later apologised over her dealings with Foster. There was no suggestion the deal was illegal.

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