A Chinese court took the unusual step yesterday of dismissing a charge of leaking state secrets against a researcher for The New York Times but sentenced him to three years in jail for fraud.

It is rare for a court in China to find a defendant not guilty, especially on such a serious charge, but the severity of the sentence for fraud underscored the Government’s determination to punish journalists whose reports are deemed to challenge the system.

Zhao Yan, 44, had been accused of telling the American newspaper of details of rivalry between President Hu Jintao and his predecessor, Jiang Zemin, in their struggle for control of the military in 2004.

But in a surprise turn, the court said there was "insufficient evidence" for the state secrets charge. His lawyers had said earlier that the journalist could have been sentenced to 10 years on the state secrets charge.

Guan Anping, a member of Mr Zhao’s defence team, said: "This is a big victory. It’s a victory for us and a victory for the legal system in China."

However, the Beijing No. 2 Intermediate People’s Court found Mr Zhao guilty of fraud, after allegations that he had taken 19,500 yuan (£1,300) from a villager in northeast Chinal on the promise of helping him to avoid "labour re-education" — a form of imprisonment.

Mr Zhao’s sister described the fraud charge as an "excuse" for the authorities to jail him. Zhao Kun said: "I know my brother well. He speaks up for the common people. He wouldn’t cheat a farmer like that."

His lawyers said they would meet him on Monday to decide whether to appeal. Mr Guan said: "I’ll suggest that we appeal. The difference is too big between our claim that he’s innocent of fraud, and the court’s decision."

Mr Zhao, an investigative journalist for Chinese publications before he joined The New York Times, has been in detention for two years while prosecutors prepared their case and will have to serve only the remaining year of his sentence.

The handling of the case showed the determination of the authorities to find evidence against Mr Zhao. Only after he had been held for several months did investigators add the fraud charge.

Then a court threw out parts of the case in March, apparently a move aimed at minimising strains with Washington before a visit by President Hu. But the charges were later refiled and Mr Zhao stood trial in June.

Mr Zhao was arrested in September 2004 after The New York Times correctly reported that former President Jiang Zemin was about to resign from his last official post as the country’s top military leader. Zhao was charged with leaking state secrets to the newspaper, which he and The New York Times always denied.

Bill Keller, the newspaper’s executive editor, welcomed the court decision on the secrets charge. "We have always said that, to the best of our knowledge, the only thing that Zhao Yan committed is journalism."

Jerome Cohen, an American expert on Chinese law who advised The New York Times, said the case was a rare example of a Chinese court acquitting a defendant on such politically sensitive charges. "Now conviction on the fraud charge helps to ‘save face’ for the law enforcement agencies."

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