By Sebastien Malo

NEW YORK (Thomson Reuters Foundation) - Dubai has dropped the case against a British woman who was accused of extramarital sex after reporting that she had been raped by two British men while on holiday in the Gulf State.

The Dubai government said the public prosecutor had closed the case against the 25-year-old woman after examining a video on the mobile phone of one of two British suspects and concluding the act was consensual.

The case received global attention with human rights groups saying it highlighted persistent and deep-rooted prejudice against women in Dubai, one of seven emirates that make up the United Arab Emirates (UAE).

A statement from the Dubai government said statements given by the woman and two suspects as well as investigating officers from Dubai police "showed that the act happened with the consent of the three parties in question".

"All three parties involved in the case are in the process of receiving their passports and are free to leave the UAE," the statement said.

Britain-based legal advocacy group Detained in Dubai said a charge of extramarital sex can lead to imprisonment and flogging in Dubai, which draws a large number of expatriates and visitors and boasts a tourism industry tailored to a Western way of life.

Radha Stirling, founder and director of Detained in Dubai, said the international attention that the case received may have contributed to the decision to drop the charges.

But she called for policy changes to avoid a repeat of the situation.

"We hope that the UAE takes this as yet another example of why they need to implement a policy that protects victims of crime against retaliatory charges or counter criminal accusations," Stirling said in a statement.

The woman's family said their daughter was on holiday with plans to travel to Australia when she was reportedly raped by two British men in a hotel room in Dubai and then arrested for reporting the assault.

The family last month launched an online appeal for funds to cover the woman's legal defense, raising some $38,000 (£30,500).

"Please help my daughter, she is being held in a prison cell in a foreign country for up to one year if we can't bail her out," the family wrote on the fundraising website.

The last posting on the website from the family said they had yet to receive official confirmation that their daughter had been released.

A spokeswoman for Britain's foreign office said this was a matter for the Dubai prosecutor.

(Reporting by Sebastien Malo, Editing by Belinda Goldsmith; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights and climate change. Visit http://news.trust.org)