The Chinese government partially cooled its high-profile row with Rio Tinto today by dropping the central claim that the four arrested employees were stealing state secrets.

However, they still face lesser charges of stealing commercial secrets and bribery.

The four, one Australian and three Chinese nationals, have been detained for the past five weeks amid allegations of espionage and corruption at a time when China is negotiating the future contract prices for iron ore.

The official China news agency said they are now “suspected of using improper means to obtain commercial secrets about or country's steel business”.

Despite watering down some of the more dramatic allegations that have come out of China in recent weeks, such a commercial secrets charge could bring jail terms of up to three years, or even seven years in the “most serious cases”, according to prosecutors.

But the new allegations are less serious than the original catch-all charge of stealing state secrets which the Chinese authorities originally cited when they detained the men.

Rio has consistently denied that its employees spied on Chinese steel mills to try to rig the price of iron ore.

Jerome Cohen, China law specialist at New York University, said of today's developments: “This puts this as a white-collar crime, a commercial crime, and not espionage involving state secrets.”