The first of 12 foreign terrorist suspects held in British custody for years without charge learned today that he would soon be released on bail, following a ruling that indefinitely detaining the men was unlawful.

Mahmoud Abu Rideh, a Palestinian, was granted bail by the Special Immigration Appeals Commission (Siac) , the court set up to hear applications from terrorist suspects. He will continue to be held until another hearing fixes conditions for his release.

In a written judgment given at Siac today, Mr Justice Ouseley said Mr Rideh would be granted bail due to the deterioration in his mental health since his detention in 2001. The statement said Mr Rideh had a history of mental health problems stemming from his time as a young man in Palestine and continuing following his arrival in the United Kingdom in 1995.

He was firstly detained at Belmarsh but was transferred to Broadmoor Special Hospital in July 2002. Doctors have found that "Belmarsh had been severely damaging and that in Broadmoor the applicant's condition had been affected by the fact of indefinite detention without trial, subject to the regime of a high security hospital".

Mr Justice Ouseley said: "The longer the applicant was detained, the more dependent and institutionalised he became and 'deskilled' in coping in the community. There has been and continues to be a detriment to the applicant's mental health from the indefinite nature of his detention as he sees it."

He said the commission had balanced the diminished risks that Mr Rideh posed "against the effect on him of past and continued detention". He said: "Continued detention for this particular detainee is becoming a disproportionate response to the risk in view of other methods of control

which can be put in place."

He said Mr Rideh remained "rightly certified as a suspected international terrorist who is, on sound ground, believed to be a risk to national security".

The exact conditions of bail have not yet been set but Mr Rideh will continue to receive medical treatment in his own home, where he will live with his wife and five children.

Lawyers for two other detainees, known only as A and P, argued today at Siac that they only wished to be granted bail if they were not placed under house arrest. Ben Emmerson QC, speaking for the two Algerian detainees, said: "This would be replacing one type of indefinite detention without trial with another."

Ian Burnett QC said the Home Secretary did not oppose bail as long as the two men were freed under the same bail conditions as those applied to G, the first of the detainees to be freed on bail last April.

G, who was freed on mental-health grounds, is under house arrest, has an electronic tag and cannot use the internet. Mr Emmerson said these conditions have "placed an intolerable burden on his family".

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