Kate McCann has been warned she could be charged with the "accidental" killing of her daughter Madeleine after Portuguese police directly asked her whether she was behind the toddler's disappearance.
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In an extraordinary twist, Mrs McCann's family said detectives now believed she caused the four-year-old's death in their holiday apartment, then hid the body before returning a month later to dispose of it.
It was claimed that police had offered Mrs McCann a "deal" of a two-year jail sentence if she confessed and told them where the body was.
The astonishing developments followed the discovery of blood in a car the McCanns hired four weeks after Madeleine's disappearance 128 days ago, which police believe proves Mrs McCann killed Madeleine.
The allegation was dismissed as "ludicrous" by Mrs McCann's husband Gerry, while her parents said the police investigation had become "a joke".
Mrs McCann was declared a formal suspect, or "arguida" by police, who spent a second day questioning her in the Algarve town of Portimao before releasing her without charge five hours later.
Mr McCann was also questioned, but remains a witness rather than a suspect.
Mrs McCann has been warned by her lawyer Carlos Pinto de Abreu to be prepared for the fact she might now be arrested and charged.
A family spokeswoman, Justine McGuinness, revealed that Mrs McCann had been asked outright if she had killed her daughter, and was "shocked and angry" at the allegation, which she emphatically denied.
Miss McGuinness said: "They believe they have evidence to show that in some way she's involved in the death of her daughter, which of course is completely ludicrous.
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"They have suggested that blood has been found in a hire car that they hired 25 days after Madeleine was taken. How on earth could you hide a body for that long? We are in a hot climate.
"When this was put to Kate she was very taken aback. It was the first time she had heard the allegation and she actually swore at police."
Mr McCann's sister, Philomena, later revealed the plea bargain offered by detectives.
She said: "They tried to get Kate to confess to having accidentally killed Madeleine by offering her a deal through her lawyer, which was 'if you say you killed Madeleine by accident and then hid her and then disposed of the body, then we can grant you a two-year jail sentence or even less. You may get off because people feel sorry for you'."
According to one report, the police asked Mrs McCann, a doctor, whether she had sedated her daughter, leading to speculation that detectives think she may have accidentally given Madeleine an overdose.
Mr McCann, 39, expressed his own frustrationin his blog on the Madeleine campaign website, saying: "We will fight this all the way."
Police had told Mrs McCann before she went for questioning that they had 22 "difficult" questions to put to her further to the information she had given them during 11 hours of questioning on Thursday.
Whistles and jeers mingled with shouts of support as she arrived at the police station today carrying Madeleine's favourite toy, cuddle cat.
