"…[In] light of opinions expressed in the media and in different quarters on the matter, the government has decided to withdraw the measure," the Interior Ministry said in a press release.

The caretaker administration had been trying to exile the two bitter rivals as part of a drive to clean up Bangladesh’s notoriously corrupt politics

Zia and Hasina, who represent rival political dynasties, have held power alternately since 1991.

Their feud spilled over into deadly street protests that caused the government to scrap scheduled elections and declare a state of emergency.

"It does not really matter to this government whether they are in the country or not," Law Adviser Mainul Hosein told reporters..

"If there are allegations of corruption against them, they will be prosecuted," he added.

"We have asked the commercial banks to provide all banking information of Khaleda Zia and Sheikh Hasina," said a senior bank official.

A government minister said Khaleda could face corruption charges if she stayed in Bangladesh.