THE defendants in the Maxwell fraud trial walked free from court yesterday after a London jury acquitted them of all charges of defrauding the Maxwell pension funds. The acquittals prompted fresh calls for a review of the way in which cases of alleged fraud are prosecuted.

The Serious Fraud Office (SFO), which brought the prosecution, found itself once again at the centre of criticism. The Labour Party committed a future Labour government to a review of the SFO's operations.

Mr Kevin Maxwell and Mr Ian Maxwell, sons of the late publishing magnate Robert Maxwell, and Mr Larry Trachtenberg, a former adviser to Robert Maxwell, had all faced charges alleging they had dishonestly misused pension fund assets to raise loans to save the debt ridden private Maxwell companies.

Mr Kevin Maxwell faced two charges involving £122 million sterling, while Mr Ian Maxwell and Mr Trachtenberg faced one charge involving £22 million.

There were gasps in court when the jury of seven women and five men returned the verdicts. Mr Kevin Maxwell remained composed and collected. His brother and Mr Trachtenberg both wept and embraced relatives.

Afterwards, the Maxwell brothers gave thumbs up signs to reporters outside court. Mr Kevin Maxwell, who gave evidence in his defence for 21 days, said he was very pleased and relieved". He repeated the comment of the trial judge that no jury had been given a better opportunity to judge the honesty of a witness.

Mr Ian Maxwell said of his brother, who had taken responsibility for the Maxwell groups' financial affairs after their father's death: "I trusted him then as I trust him now."

Further charges of conspiracy to defraud remain outstanding against all three defendants and three other former Maxwell group directors, Mr Robert Bunn, Mr Michael Stoney and Mr Albert Fuller.

The SFO must now decide whether to continue its prosecutions over the Maxwell affair. Its decision is expected within a week. However, it is widely believed that further charges will be dropped following yesterday's verdicts. Mr Alun Jones, Mr Kevin Maxwell's lawyer, told the judge it would be "oppressive" for the SFO to bring further prosecutions against his client.

Sir Nicholas Lyell, the attorney general, refused to comment on the acquittals or their implications for the future of the SFO.

But in a statement issued after the verdicts, Mr George Staple, director of the SFO, defended the office's handling of the case.

"It is our job to conduct a thorough investigation and ensure defendants are fairly prosecuted and that has happened."