THE original files stolen in the Fettesgate incident have been

recovered by detectives in an operation mounted in Edinburgh, though

photocopies may still be circulating.

Police were unable to confirm last night that two men involved with

the Edinburgh gay scene had been detained for questioning.

It is understood that the men, one from Edinburgh and the other from

Dundee, were held under Section 2 of the Criminal Justice (Scotland)

Act, 1980. This allows police to detain a suspect for up to six hours.

Meanwhile, a property factor, Mr Michael Glen, whose home at Gayfield

Place in Edinburgh was raided by police on Tuesday morning, told The

Herald he had been ''set up'' by disgruntled homosexuals.

He said that four police officers had arrived at his premises early in

the morning with a search warrant.

While they were there, he said, ''an envelope came through the letter

box. It was a small brown envelope stuffed full of papers. It was so

full that they were bursting out.

''They were originals from the break-in. The police took them away.''

Last night, however, Lothian and Borders police would not pinpoint

where the documents had been seized, but said they had been found on

Tuesday night in an operation in the Edinburgh area. They were in two

hold-alls.

At a news conference earlier, Sir William Sutherland, the chief

constable, ruled out terrorists or animal rights extremists as the

source of the break-in at his headquarters in East Fettes Avenue last

month. Members of the Animal Liberation Front had been initially

suspected after an ALF slogan was found daubed in the building.

In an emotional voice responding to questions about the effect of the

raid on his force, Sir William said: ''This has knocked us back.'' But

he believed the force would recover. People would see that its overall

objective of providing a good service to the community, efficiently and

effectively, was being met.

The chief constable told the news conference that while a significant

number of the documents had been recovered he could not yet

categorically say everything stolen was back in their possession.

Pressed on the number of files recovered, he said: ''I believe that

all of the files we had listed as stolen have been recovered.''

Sir William said some equipment taken from the offices of the Scottish

Crime Squad and some personal property of officers had also been found.

He stressed that none of the documents related to the security issues

which the force had to deal with and in particular did not apply to the

forthcoming EC Summit, the papers for which were kept under secure

burglar alarm conditions in another part of the building.

He said at no time had the Foreign Office expressed worries about the

force's competence to handle security at the Summit.

The files recovered were operational ones properly kept by the

Scottish Crime Squad. A lot of them related to criminals and criminal

records.

Sir William said: ''It is sensitive. It obviously must be harmful if

files which relate to the way we go about our investigative work fall

into the wrong hands. It must make it more difficult in the future.''

The chief constable said no arrests had been made so far but added

that he was optimistic of clearing up the crime.

He admitted a photo-copying machine had been used by the thieves and

there could be copies of documents circulating.

He said he believed whoever was behind the break-in had a reasonable

appreciation of the building and had put a reasonable amount of time

into the planning of the crime.

Since the investigation into the break-in began around the middle of

last month, a Scotland on Sunday journalist, Mr Ron McKay, has been

charged with reset while a Sun reporter was detained in a separate

operation and questioned for six hours before being released.

Last night after the recovery of the documents the Crown Office in

Edinburgh said the charge of reset against Mr McKay was being

investigated by the procurator-fiscal in Edinburgh who would report to

them in due course.

Meanwhile, Councillor Ross Martin, police board chairman, in a

statement to a meeting of Lothian Regional Council, said the break-in

was a matter of grave concern and would be the subject of a report by

the chief constable to the joint board on August 20.

He gave an assurance that the report of an internal investigation by

Mr Hector Clark, the deputy chief constable, into the break-in would be

made available to all councillors.

Confidence in the chief constable and the force was expressed by both

Councillor Martin and Councillor Donald Gorrie, Liberal Democrat, who

said it was important for the council to demonstrate its accountability

to the electors and to show there was no ''cover up''.