For the first time in 21 months, Whitewater figure Susan McDougal walked away from a courthouse a free woman.

McDougal's freedom could prove temporary. She faces a California embezzlement trial next month and a contempt trial here in the fall.But she savored a tearful courtroom reunion with relatives and her fiance Thursday, moments after U.S. District Judge George Howard Jr. said he would "lean to the side of compassion and mercy" and release McDougal because of her back and neck problems.

"I am a much better person today than the one you sentenced," McDougal told the judge. "I promise you won't be sorry."

McDougal was convicted in 1996 as part of the Whitewater investigation, along with Gov. Jim Guy Tucker and ex-husband, Jim McDougal. She was convicted of four felony fraud counts involving an illegal loan from a federally backed lending company.

She didn't begin serving her two-year sentence until March, however. Before that, she served 18 months for civil contempt for refusing to answer questions before the Whitewater grand jury.

Howard reduced the sentence to time served, but left intact three years worth of probation and his order that she repay $300,000 to the Small Business Administration.

The judge also ordered her to 90 days home detention. He ordered her released immediately; she has 10 days to tend to affairs and report to her parents' home in Camden.

Among family members in court were her parents, James and Laura Henley. "I'm very happy and very thankful," Laura Henley said. "I prayed for it from the time she went in, but it was doubtful whether I'd see this day or not. It's been a long wait."

In China, President Clinton told reporters that he hoped his former business partner gets better now. "I hope that the judge's decision puts her in a position where she can get over her pain and difficulty," Clinton said.

Dr. Ronald Fisk, a clinical neurologist from Los Angeles, testified Thursday that McDougal needs careful medical assessment and treatment for seriously progressive curvature of the spine and related disk problems.

She contended that the time she has spent in prison - more than anyone else sentenced in the Whitewater affair - has worsened the scoliosis she has had since birth.