The detention of an academic and a criminal case against a singer accused of spreading rumours about economic stability in crisis-hit Latvia have sparked a debate about freedom of speech in the ex-Soviet state.

The incidents come at a time of growing economic problems for Latvia, a European Union and NATO member since 2004. The country has hit recession, turned to the International Monetary Fund (IMF) for aid and nationalised its second-largest bank.

"Is freedom of speech a criminal offence?" asked newspaper Latvijas Avize on its front page on Saturday. "Repression of opinions," blared another daily, Neatkariga Rita Avize.

One person writing a comment on a news portal likened the situation to the former Soviet Union, which Latvia was part of for 50 years until 1991.

The row began when the Security Police this week threw an academic into a cell for two days after an online newspaper debate last month where he said people should not trust banks or keep their money in the local currency, the lat.

The Security Police said this week it had launched another case on Nov. 14 against an actor who said at a concert that people should go to two banks and take out their money.

Both men, in media interviews, deny any wrongdoing.

"Of course it is a freedom of speech issue," said Karlis Streips, a well known journalist and commentator, adding such incidents should not occur in a democratic, EU country.

The Security Police, a branch of the force which deals with internal issues including fighting terrorism, defended its actions.

"The Security Police does not view the criminal procedures which have been started as violating freedom of speech," the force said in a statement.

It noted the cases were launched under a law passed last year, forbidding the spreading of false information about the economic situation.

The centre-right coalition, made up of four parties, says the law is designed to prevent panic over the economy. It was passed after rumours last year about a devaluation.

There was a wave of selling of the currency last weekend and Prime Minister Ivars Godmanis said on Wednesday there were no plans to devalue.

Local media have identified the academic as Dmitry Smirnov, from a college in the western port town of Ventspils.

"I don't think I did anything wrong because what I said was not aimed at undermining the stability of the Latvian financial system or the lat," he told newspaper Diena on Friday. He said he was afraid he would be jailed again if he made more comments.

Newspapers have identified the man who made the comments at a concert as a musician who said he was simply making a joke.