POLICE arrested two animal rights campaigners for alleged public indecency less than a minute after the pair stripped down to their heart-covered underwear in Tsim Sha Tsui yesterday. But later a police spokesman admitted that Dan Mathews and Julia Sloan, from the United States-based organisation People for the Ethical Treatment of Animals (PETA), which has organised naked and near-naked anti-fur protests throughout the world, had notbeen breaking the law. ''We had information that they intended to strip naked,'' the assistant district commander for operations in Tsim Sha Tsui, Chief Inspector Daniel Lawley, said. ''So we arrested them when they had just got down to their underwear. We were trying to avoid a situation of public indecency.'' But he admitted that in retrospect the police action had been somewhat premature, and said charges against the pair had been dropped. Shouting ''Don't kill animals, don't wear fur'' in Cantonese, and dressed in little more than boxer shorts and a banner that stated they would ''rather be naked than wear fur'', Mr Mathews and Ms Sloan were led from the Tsim Sha Tsui waterfront towards apolice van. Eight police officers, five of them in plain clothes, had come armed with heavy blankets, which were draped around the two immediately after they had done their partial strip.