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NEW DELHI: Indian officials said Tuesday they had dropped all criminal charges against a top Tibetan Buddhist monk seen as a potential successor to the Dalai Lama.

Police in the northern state of Himachal Pradesh filed conspiracy charges against the Karmapa Lama last December, after authorities found more than $1 million in foreign cash, including Chinese yuan, stashed in his monastery.

The discovery led to allegations in the Indian media vigorously denied by the 26-year-old Karmapa that he was a Chinese spy.

"We have decided to drop all criminal charges against the Karmapa," state Home Office official S.P. Singh told AFP by telephone.

"The police and the government lawyers thoroughly investigated all the charges and found no real evidence to pursue a case against him," Singh said.

The Karmapa, Urgyen Trinley, is revered by his followers as the 17th incarnation of the head of the Karma Kagyu lineage, one of the four major schools of Tibetan Buddhism.

He fled Tibet in 1999 at the age of 14, reaching India after a perilous eight-day winter journey by foot and horseback over the Himalayas.

Recognised by both China and Tibet's exiled spiritual leader the Dalai Lama, the Karmapa is seen as as having the highest profile of a cast of young lamas who might fill the void when the Dalai Lama, now 76, dies.

Since fleeing Tibet, he has mainly lived at the Gyuto Monastery in Dharamshala, the northern Indian hill station that is the seat of the Tibetan government in exile.

Officials at the Karmapa's office welcomed the decision to drop the charges.

"We had full confidence in the rule of law, and knew that the government would eventually conclude His Holiness was not involved in anything criminal," spokesman Gompo Tsering told AFP.

The Karmapa's office had always insisted that the money seized during a police raid on the monastery in January 2011 was accumulated from "offerings by devotees" from around the world.

The Indian media, quoting unnamed security sources, reported concerns at the time that the Karmapa could be a Chinese stooge sent to India to set up pro-Chinese monasteries.

The Karmapa had conceded there had been "financial mismanagement" but said he had trusted the administration of the funds to "lay workers".

"I have my hands full in fulfilling my religious duties," he told reporters in May last year.

Copyright AFP (Agence France-Presse), 2012

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