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A court in Egypt has acquitted at retrial 43 employees of non-governmental organisations accused of illegally receiving foreign funding.

In 2013, three Egyptian workers, an American and a German were sentenced to two years in prison. However, they avoided spending time in jail.

Eleven others got suspended sentences, while the rest were tried in absentia.

At the time the US expressed outrage at the case, which involved NGOs linked to the Republican and Democratic parties.

Amnesty International said Thursday's retrial verdict was a "step in the right direction for Egyptian justice".

"This was a bogus case that targeted human rights defenders simply for doing their legitimate work and should never have happened in the first place," said Najia Bounaim, the group's North Africa campaigns director.

However, Ms Bounaim warned that the ruling only related to the first phase of the case, which investigated funding on international NGOs in Egypt, including the US-based International Republican Institute and National Democratic Institute.

The investigation into local Egyptian NGOs was ongoing and dozens of staff were still at risk, she added.

The authorities stepped up a crackdown on NGOs in 2013, when the military ousted the country's first democratically elected president, Mohammed Morsi, following protests against his rule.