Police from London’s Metropolitan Police are expected to return electronic equipment such as computers, laptops and telephones – removed from Mr Withers’ Antrim home when he was arrested – later this month.
“It tells me they have no further interest in me, otherwise they would not return the so-called evidence,” he said.
“If they have got evidence you would want to keep it to go to court.
“They are returning that evidence which really means they are following the wrong lead.
Mr Withers worked for the country’s government when it was led by the left-wing single-party regime of Albert Rene.
He seized control in a coup in 1977 and led the country for almost three decades before stepping down in April 2004.
“My job was to conduct what you might call commercial intelligence services to protect the country from being attacked or usurped by dissidents and their associates and paid servants namely mercenaries,” said Mr Withers.
Asked if this meant he spied for the Seychelles government, he said: “You could say that – no different from being a spy for MI5 of MI6.
“Each country has to maintain its own security services to protect itself, and that is what I provided, a service to Seychelles amounting to external intelligence gathering.”
This included gathering information on opposition exiled politicians from the Seychelles who had fled to London.
One of them, Gerard Hoarau, was gunned down outside his home in a quiet north London street in 1985 – a house which Mr Withers had arranged to be bugged.
“I did not personally plant the bugs, monitor them or control them in anyway. I had absolutely no knowledge or part in the murder of Gerard Hoarau.
At the time of the murder, the government of the Seychelles was blamed as chief suspect.
“I certainly had nothing to do with it. I can also say categorically that to my knowledge neither had the Seychelles government,” said Mr Withers.
A spokesperson for the Metropolitan Police said: “The 77-year-old man remains released under investigation.
“Officers continue to investigate the murder of Gerard Hoarau in Edgware in 1985.”
A number of people were previously arrested in connection with the investigation, but no-one was charged with murder.
Three people were convicted in 1986 for perverting the course of justice.