Nader Attia, an old Copt who was accused of sexually assaulting a six-year-old Muslim girl in January, was released pending investigations on Monday.
A source from the church told Al-Ahram Arabic news website that that the defendant will not return to his home in Al-Marashda to avoid possible further sectarian strife.
Attia, a shop owner in Qena of Upper Egypt, was arrested on 18 January after residents of Al-Marashda village accused him of the sexual attack. Priests handed him in, fearing someone in the community would attack or kill him.
The accusations did cause an eruption of violence, the torching of several shops in the village and a raid on Al-Marashda Church.
A number of villagers defend the Copt, saying he had always treated the young girl as his child.
Eyewitnesses had earlier added that the accusations were circulated by girl's neighbours and not by her family.