The US Government has paid $2 million to settle a lawsuit brought by a man who was wrongly identified as a suspect in the Madrid train bombings.

Brandon Mayfield, a lawyer from Portland, Oregon, was detained for two weeks in 2004 as a "material witness" after FBI investigators thought they had matched his fingerprints to a plastic bag full of detonators found after the Madrid bombings on March 11, 2004.

After his release, he sued the US Government and claimed that he had been targeted because he was a Muslim. Mr Mayfield converted to Islam after marrying his Egyptian wife and alerted investigators after the initial, mistaken fingerprint match because he worshipped at a mosque in Oregon used by a local hardline group.

"Not only does my detention as a material witness in the Madrid bombing underscore the fallacy that fingerprint identification is reliable, I hope the public will remember that the US government also targeted me and my family because of our Muslim religion," he said yesterday after settling the case.

A report into the Mayfield case in March cleared the FBI of any deliberate wrongdoing in the investigation, but criticised investigators for failing to identify discrepancies between a digital image of a fingerprint sent by Spanish investigators and the image on US files. Mr Mayfield served in the US Army from 1985 to 1994.

"Among other things, the examiners applied circular reasoning, allowing details visible in Mayfield's known prints to suggest features in the murky or ambiguous details... that were not really there," said the report by the FBI's internal watchdog.

Despite doubts among Spanish police about the match, the FBI applied for warrants to tap Mr Mayfield's phone and mobile phone and to carry out secret "sneak and peak" searches of his home and office. Agents were eventually forced to confront Mr Mayfield after he became suspicious that he was being followed and his wife found unexplained footprints on their carpet.

A series of coincidences and circumstantial evidence that appeared to link Mr Mayfield with a group know as the "Portland Seven", a local group of extremist Muslims prosecuted for planning to join the Taleban, helped convince the FBI that they had found a terrorist with information about possible attacks in the US.

When agents finally arrived at his office in May 2004, they first tried to convince Mr Mayfield to become a double agent and spy on his supposed fellow militants.

The FBI office in Oregon said that it was proud of their work in the Mayfield investigation yesterday. "If a similar investigation was being conducted, and we were provided a fingerprint identification, we would do exactly what we did in the case of Mr. Mayfield," said agent Robert Jordan. "We are very proud of what we did here, but we recognize that our laboratory made a mistake."

A spokeswoman for the US Justice Department said that the agency had adopted several recommendations to improve its fingerprint identification process "to ensure that what happened to Mr. Mayfield does not happen again".

Mr Mayfield intends to continue his legal battle against the Government with a challenge against America's Patriot Act, which was used in his case to authorise the tapping of his phone and covert searches of his house. Mr Mayfield contends that law violates his constitutional rights because it allows government searches without probable cause that a crime has been committed.

The fingerprints found on the plastic bag were eventually matched to Ouhnane Daoud, an Algerian who had blown himself up with six other men suspected of planning the Madrid attacks when they were surrounded by Spanish police on April 3, 2004, more than a month before Mr Mayfield's arrest.

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