The two Swedish contractors were arrested Wednesday on suspicion of plotting sabotage after one of them was stopped while carrying a plastic bag with traces of a highly explosive substance on it.

At the time, authorities said the second man was detained because ownership of the bag was uncertain. Both were held in custody overnight

Police spokesman Kenth Andersson said Thursday that there was no explaination as to why the bag would contain explosive residue, but there was not enough evidence to hold the contract employees for sabotage. Andersson says both men were released Thursday.

Police did not release the suspects’ identities, saying only that one was born in 1955 and the other in 1962 and both were Swedish citizens.

Another police spokesman Sven-Erik Karlsson said the older suspect was known to police from prior investigations, but would not say what the previous investigations were about.

Police raided their homes late Wednesday, but did not find anything suspicious, Karlsson said.

Prosecutor Gunilla Ohlin said there was no reason to continuing holding the men, but hinted the investigation agaist them will continue.

"There was no reason to keep them under arrest anymore, but suspicions against them remain, he said.

This would suggest authorities do not have strong evidence that the men were planning to attack the Oskarshamn nuclear plant, about 250 kilometres south of Stockholm.