A Palestinian suspected of raising funds for terrorist groups linked to al-Qa´eda was granted conditional bail yesterday by a court in London because the damage to his mental health caused by indefinite detention had reduced the risk he posed to national security.

Shortly after the decision was announced by Siac, the Special Immigration Appeals Commission, it was told that Charles Clarke, the Home Secretary, considered it appropriate for the court to "exercise its bail jurisdiction" in respect of around a dozen other suspected foreign terrorists currently detained without trial.

However, there would be restrictions on their release. Mr Clarke´s counsel, Ian Burnett, QC, argued that two Algerians who applied for bail yesterday should be freed only on conditions that amounted to house arrest.

Their counsel, Ben Emmerson, QC, replied that if the men, known as A and P, were given the choice of complete isolation at home or remaining in prison they would prefer to stay where they were. Describing his clients as "guinea pigs", Mr Emmerson said any bail conditions imposed by Siac would be a "template" for the new control orders proposed by the Home Secretary last week.

It also emerged that Mr Clarke was seeking to revoke the bail granted last year to an Algerian known as G because two unidentified men were said to have breached the conditions of his house arrest by visiting his flat without permission.

The man granted bail yesterday was Mahmoud Suliman Ahmed Abu Rideh, 33, who was born in Jordan to stateless Palestinian parents and claimed asylum on arrival in Britain 10 years ago.

He was detained in December 2001 under newly-introduced anti- terrorism legislation, accused of being "an active supporter of various international terrorist groups, including those with links to Osama Bin Laden´s terrorist network".

After six months in Belmarsh Prison, Abu Rideh was diagnosed as mentally ill and transferred to Broadmoor special hospital. At a hearing last December, he applied for bail. A psychiatrist told Siac that Abu Rideh was "fearful of the Government, believing that it was trying to kill him or that Zionists were. He continued to experience voices, as he had done for many years".

However, his "extremely serious mental health condition had significantly improved since his transfer to Broadmoor".

Yesterday Mr Emmerson, for Abu Rideh, asked Siac to prevent the press from reporting any of the detailed medical evidence in the court´s written judgment, even though it had already been disclosed in open court.

The application for reporting restrictions was opposed by The Daily Telegraph and dismissed by Mr Justice Ouseley, Siac´s chairman, after a brief hearing.

Mr Emmerson argued that publication would breach his client´s right to respect for his private life under Article 8 of the Human Rights Convention, while the newspaper maintained that this was outweighed by its right under Article 10 to impart information about a court that often sat in closed session.

Ruling on the bail application, Mr Justice Ouseley said that "there has been and continues to be a detriment to [Abu Rideh´s] mental health from the indefinite nature of his detention as he sees it".

He could be treated better at home. But what mattered was the effect of his health condition on the risk to national security that he continued to pose.

Abu Rideh remained committed to the "extremist views, delusions even" which had previously motivated him.

Psychiatric evidence suggested that his desire to avoid a return to prison would discourage him from resuming his terrorist activities.

His wife would have a "real interest" in trying to stop him using any communications equipment that might be smuggled into their house because she needed him to be at home with her and their five children.

Although the risk to the public could never be eliminated, it would be "inhibited to a significant degree" by bail conditions to be set at a later date.

Bail applications for A and P will be further considered today. (© Copyright of Telegraph Group Limited 2004. 02/01/05)