An extremist Muslim cleric regarded as Osama bin Laden’s “spiritual ambassador in Europe” must be released on bail, a judge ruled yesterday.

Abu Qatada, 48, who won his legal fight against deportation to Jordan last month, will be freed from prison under strict bail conditions, amounting to 22-hour house arrest, despite being deemed a threat to national security.

The cleric applied to the Special Immigration Appeals Commission (SIAC) for bail on the ground that it was inhumane to detain him indefinitely if there was no prospect of his being deported.

The order by Mr Justice Mitting to release him is the latest in a series of judicial decisions that undermine the Government’s stance on terrorism. In the past year, the courts have in effect rewritten sections of terrorism legislation and ruled that financial sanctions on terrorist suspects were absurd and unlawful.

The earlier judgment on Abu Qatada’s deportation wrecked the policy of drawing up “memoranda of understanding” for the return of suspects to Middle East countries with poor human rights records. Further embarrassments are likely to follow. The Times understands that the head of an Algerian terrorist network that allegedly plotted bomb attacks in Europe and North America is seeking to be released because the courts have thwarted attempts to deport him.

Jacqui Smith, the Home Secretary, said she was “extremely disappointed” that the courts had ruled Abu Qatada should be freed.

He will not, however, leave the high-security wing at Long Lartin jail until a detailed agreement has been reached about where he will live, what access to the internet and telephone he will have and who can visit him.

Andrew O’Connor, counsel for the Home Office, told the hearing that Abu Qatada was “in a category of his own” and posed an extreme security risk.

Mr Justice Mitting conceded that there was a security threat but said that it would be pushing the boundaries of the law to continue to detain him without trial or conviction.

It was disclosed that Norman Kember, the peace activist formerly held hostage in Iraq, was prepared to stand bail for Abu Qatada, who once made a prison video appealing that he be released unharmed.

Abu Qatada arrived in Britain in 1993 on a forged United Arab Emirates passport, and claimed asylum on the ground that he would be tortured if he returned to Jordan. immigration authorities granted him temporary leave to remain as a refugee in 1994.

The Jordanian courts sentenced him to life imprisonment in his absence in connection with a series of bombings in Amman in 1998.

By then Abu Qatada was living with his family in Acton, West London, preaching at local mosques, allegedly raising funds for jihadi groups in Chechnya and offering theological justifications for terrorist actions, including the slaughter of women and children in Algeria.

His presence along with that of other radicals led French counterterrorism agencies to nickname the city Londonistan.

In February 2001 an anti-terrorist branch raid on his home led to the seizure of £180,000 in various currencies. In October 2001 Abu Qatada told his followers he had received a special message from Afghanistan and the time had come to declare holy war. Police in Germany found cassette recordings of his sermons in a flat used by Mohammed Atta, leader of the September 11 attacks.

Although he was under MI5 surveillance, Abu Qatada disappeared in December 2001, shortly before he was due to be arrested. He was discovered in October the following year and taken into custody under emergency anti-terrorist powers.

While in hiding he had continued to communicate with his followers on the internet and he heavily influenced Abu Musab al-Zarqawi, the murderous leader of al-Qaeda in Iraq.

Abu Qatada was released on a control order in 2004 but rearrested under a deportation warrant the following year. Since then he has been fighting a legal battle against attempts to return him to Jordan.

Ms Smith said: “I am already seeking to appeal the Court of Appeal’s decision that it is not safe to deport Abu Qatada and we will continue with deportation action with this and the other Jordanian cases.”

David Davis, the Shadow Home Secretary, said: “The Government should at last answer our calls to focus on prevention and prosecution — for example by allowing the use of intercept evidence in court — rather than just trying to deport these individuals once they are here.”

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