Dozens of suspected Islamic militants have been released from prison without trial in Pakistan in a direct challenge to President Musharraf by the country’s judiciary.

Most had been seized by the notorious Inter Services Intelligence (ISI) and held, without being charged, for periods of up to three years. Also freed were a number of critics of General Musharraf’s regime and activists demanding autonomy in the southwestern province of Balochistan.

The move, ordered by the Supreme Court, is likely to raise concern in Britain and the United States over Pakistan’s continued role as an ally in the War on Terror. It also highlights the erosion of General Musharraf’s authority after he was forced to reinstate Pakistan’s chief justice, a decision that has emboldened legal challenges to his troubled administration.

The release was welcomed by human rights groups who have campaigned on behalf of hundreds of people who have gone missing in Pakistan since 2001 and the al-Qaeda attacks in the US. Late last year Iftikhar Mohammad Chaudhry, the Chief Justice, ordered the intelligence service to charge or release all those who had been detained.

The most prominent figure to be released this week was Mohammed Naeem Noor Khan, whose arrest in Lahore in 2004 was seen as a breakthrough by Pakistan’s intelligence service. Shortly after his arrest Pakistani investigators had announced that Khan had planned terrorist attacks in Britain and the US. He was described as a crucial link between Osama bin Laden’s inner circle, holed up in mountainous terrain in Pakistan’s lawless tribal region, and al-Qaeda’s operatives in Britain and other parts of the world.

Information obtained from Khan is believed to have led to the arrest of Dahron Bharot, also known as Eassa al Hindi, the head of an al-Qaeda cell in London and nine others. Bharot has been sentenced to 20 years in jail. It is unclear whether Khan remains in Pakistan. Aleem Nasir, a German national of Pakistani origin, was also released. He was detained by the ISI earlier this year at Lahore airport as he prepared to board a flight home. He was never charged. Hafiz Basit, 26, was freed after three years in illegal detention. He was picked up by the ISI from his house in Faisalabad in 2004. His arrest was never acknowledged by the Pakistani authorities.

It is the release of Khan that causes most concern in London and Washing-ton amid criticism of Pakistan’s perceived failure to formulate and implement antiterror laws.

Senior Pakistani security officials conceded that there had been no serious attempt to initiate legal proceedings against him. Some reports suggest that Khan was released as part of the deal to cooperate with the ISI and was kept in custody for his own safety.

In June Saud Memon, who was accused of involvement in the murder of Daniel Pearl, the Wall Street Journal reporter, was found dumped outside his home in Karachi a day before the Supreme Court was to hear his case. He died a week later. Pakistani police found Mr Pearl’s body buried in a nursery owned by Mr Memon, but authorities never acknowledged his detention.

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