A federal appeals court on Tuesday blocked fines up to $5,000 that a former USA Today reporter was ordered to pay each day she refuses to reveal her confidential sources for stories about the criminal investigation of the 2001 anthrax attacks.

The appeals court granted the request of Toni Locy, who had been ordered by a federal judge to pay the fines out of her own pocket while she appeals an order finding her in contempt of court.

U.S. District Judge Reggie B. Walton is demanding that Locy provide the names of all dozen or so Justice Department and FBI sources who provided her information for stories on the probe into the anthrax attacks.

The order from the U.S. Court of Appeals for the District of Columbia means Locy will not have to pay the fines or face further sanctions including possibly being sent to jail while her lawyers fight Walton's contempt ruling.

Locy says she cannot recall which of her FBI and Justice Department sources provided her information for two stories about scientist Steven Hatfill. Hatfill has been under scrutiny in the probe and is suing the government for dragging his name into the investigation.

Starting at midnight Tuesday, Locy was to have paid out of her own funds $500 a day for seven days, $1,000 a day for seven days and $5,000 a day thereafter until she was to have appeared in court April 3. At that time, the judge could have ordered further fines or directed that she be sent to jail if she continued to defy him.

Locy says that enforcing the contempt order could have a chilling effect by calling into question the enforceability of reporters' secrecy agreements with public officials.

"I am relieved and thankful that the court of appeals has found that my legal arguments are worthy of consideration," said Locy, a former reporter with The Associated Press who wrote the anthrax stories while at USA Today. She now teaches journalism at West Virginia University.

Appeals court judges Douglas Ginsburg, Judith Rogers and Brett Kavanaugh granted the reporter's request. Ginsburg was appointed by President Reagan, Rogers by President Clinton and Kavanaugh by the current President Bush.

Hatfill's lawyers had asked the appeals court to allow the penalties against the reporter to start immediately.

"There was no whistle-blowing here, no use of an anonymity agreement by a reporter to allow a courageous federal official to expose wrongdoing without fear of retaliation," Hatfill's lawyers wrote.

"The 'leaks' at issue here are disclosures from investigative files about one innocent and uncharged man, designed to convey through cooperative members of the media the false story that the government had made progress in the anthrax investigation," the court filing by Hatfill's lawyers added.

Five people were killed and 17 sickened when anthrax was mailed to Capitol Hill lawmakers and members of the media just weeks after the Sept. 11, 2001, terrorist attacks.

Subsequently, Attorney General John Ashcroft called Hatfill "a person of interest" in the investigation and stories by various reporters including Locy followed. Hatfill had worked at the Army's infectious diseases laboratory from 1997 to 1999. The anthrax attacks remain unsolved.