Haneef walks free as prosecution admits 'mistakes'

Indian doctor Mohamed Haneef, arrested by the Australian police on terror charges, was today released from custody after the case against him collapsed dramatically after the prosecution admitted mistakes, causing huge embarrassment to the federal government.

The end to the 25-day detention of Haneef, charged with "recklessly" providing support to a terrorist organisation by leaving his SIM card with his cousin "" one of the suspects in the failed UK terror plot "" came this afternoon at a Brisbane magistrate's court following a review.

"On my view of this matter a mistake has been made," Commonwealth Director of Public Prosecution (DPP) Damian Bugg said, adding that he withdrew the charges because he was satisfied "there was no reasonable prospect of conviction."

Haneef's lawyer Peter Russo said his client was free but he had no idea where he would go because he had no home after he failed to pay rent for the Gold Coast unit when he was in detention.

His cousin Imran Siddiqi, who had gone from Bangalore, said the first thing they would like to look at is "what happens to Haneef's visa".

Later, Haneef, who was working as a doctor at the Gold Coast Hospital in Queensland, was conditionally freed from custody, requiring him to report to the immigration department by phone every day and in person every week.

Immigration Minister Kevin Andrews, who had earlier revoked Haneef's visa after a court gave him bail, said he had made a residential determination, meaning that rather being detained in immigration custody, he would be released into residential detention.

Under attack from civil rights groups and political parties, the Australian government sought to distance itself from the legal fiasco and its fallout.

Australian Prime Minister John Howard, who had stoutly defended the police and prosecution all along, today said Federal Police Commissioner Mick Keelty and DPP Chief Damian Bugg were responsible for the handling of the case.

"I think the right thing now is for those two men to explain the process and the reasons," he said in the Indonesian resort of Bali.

"Neither do prime ministers nor attorney general directors of public prosecution conduct prosecutions," Howard said.

Foreign Minister Alexander Downer also sought to distance the government from the case, claiming no damage had been caused to the ties with India. Attorney-General Philip Ruddock said it was regrettable that charges were ever laid against Haneef, but he would not be apologising to the Indian doctor.

"I certainly regret that in the course of this investigation the DPP formed a particular view and a later point in time reconsidered that view," he said.