The man was part of a group of four people detained last weekend after Hungary's anti-terrorist police said it found explosives in a car during a raft of spot-checks sparked by the deadly November 13 attacks in Paris.
The discovery led detectives to a "bomb-making lab" in a house containing "explosives and devices that were suitable for killing people to the utmost extent," head of Hungary's Counter-Terrorism Centre (TEK) Janos Hajdu told a television channel Tuesday.
Prosecutors applied to the Metropolitan Court in Budapest to remand the chief suspect, Roland S, in pre-trial custody but the court refused, citing a lack of evidence.
The man "lives with his mother and stepfather and is a World War II hobbyist," the court said in a statement yesterday.
When he was detained he was taking home grenades, ammunition, and gunpowder that he had found in a forest using a metal detector, the statement read.
The suspect had no criminal record and was not plotting to kill anyone, the court said.
Earlier yesterday, after a closed-doors parliamentary committee meeting with Hajdu, lawmaker Zsolt Molnar said the four were "not part of a Hungarian cell" of Islamic State but rather radicals with a "confused ideology".
All four remain under police investigation for unauthorised possession of equipment capable of bomb-making.
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