The Jamaat-ud-Dawah (JuD) head, who has a USD 10 million American bounty on his head for terror activities, walked free after the Pakistan government decided against detaining him further in any other case, in a setback to India's efforts to bring to justice the perpetrators of the Mumbai terror attack.
Saeed, in his late 60s, was under house arrest for 297 days since January.
The fire-brand cleric's release after midnight came ahead of the 9th anniversary of the 26/11 Mumbai attacks in which 166 people were killed.
Saeed, addressing his supporters gathered outside his residence said: "I was detained for 10 months only to stop my voice for Kashmir.
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"I fight for the case of Kashmiris. I will gather the people from across the country for the cause of Kashmir and we will try to help Kashmiris get their destination of freedom".
Punjab province's Judicial Review Board comprising judges of the Lahore High Court (LHC) on Wednesday unanimously ordered Saeed's release on the completion of his 30-day house arrest which expired last night.
The Ministry of External Affairs (MEA) said Saeed's release confirmed once again the lack of seriousness by the Pakistan government in bringing to justice perpetrators of terrorism, including individuals and entities designated by the UN.
"It also appears to be an attempt by the Pakistani system to mainstream proscribed terrorists. Pakistan has not changed its policy of shielding and supporting non-state actors and its true face is visible for all to see," MEA spokesperson Raveesh Kumar said in New Delhi yesterday.
Using the release order to buttress his claim of "innocence", Saeed said: "I am very happy that none of the allegations against me proved as three judges of the LHC ordered my release... India had levelled baseless allegations against me. The LHC's review board decision has proved that I am innocent".
"I was detained on the pressure of the US on the Pakistani government. The US did so on the request of India," he claimed.
Several JuD supporters, gathered outside Saeed's house in Lahore's Jauhar town to celebrate his release, shouted anti- India slogans.
"Saeed has been freed as the Punjab government decided not to detain him further in any other case," a top government official told PTI.
He said that after a long deliberation, it has been decided to follow the review board's decision.
Saeed's release would lead to strong criticism from India and the US, official sources said.
"It remains to be seen as how would the PML-N government handle the foreign pressure to again detain Saeed," they said.
Punjab Assistant Advocate General Sattar Sahil said the government law officer had presented "some important evidence" to justify Saeed's detention, but all three members of the board unanimously rejected it and ordered his release.
The board refused to give further extension to the detention of Saeed's aides. They were set free last month.
According to the rules, the government could detain a person for up to three months under different charges, but for extension, it needs approval from a judicial review board.
Saeed was put under house arrest after the Mumbai attack in November 2008 but he was freed by a court in 2009.
Ten LeT militants had killed 166 people and wounded dozens in Mumbai in November, 2008. Nine of the attackers were killed by police while lone survivor Ajmal Kasab was caught and executed after a court found him guilty.
Saeed was declared a global terrorist by the US and the UN after the Mumbai attack.