AN ISLAMIC cleric said to be Osama bin Laden's European ambassador is being freed from jail.

Shiekh Abu Qatada, who briefly made Bolton his home in 1993 after he had been granted asylum in the UK, is among 12 people being released.

He will be placed under house arrest and a strict curfew, facing restrictions on his movements and possible limits on his use of telephones and the internet.

The decision was made by Home Secretary Charles Clarke following a Law Lords ruling last month that the terror suspect's detention without trial was unlawful and breached the European Convention on Human Rights.

The ruling also means the 44-year-old will also be able to claim state benefits again.

Qatada was once branded a "truly dangerous individual" by a judge.

And in evidence presented to the Special Immigrations Appeals Commission (Siac) in 2003, the then Home Secretary David Blunkett claimed Qatada was the most significant extreme Islamist preacher in the UK and that he had been "an inspiration" for terrorists including Mohammed Atta, the lead hijacker behind the September 11 attacks. One of the accusations against him was that his assets totalled £180,000, despite Qatada living on benefits. The Bolton Evening News reported three years ago that money in Qatada's bank account held at the Royal Bank of Scotland in Bolton was frozen and his benefits stopped.

But in an exclusive interview with the paper, Qatada, who is wanted in Jordan in connection with a series of explosions, faxed a bank statement to us, in the alias of Omar Mahmoud Othman, in which he claimed there was proof he did not - as investigators allege - have such as large sum of cash. It showed he had £1,205.86, although sizable amounts were frequently deposited and withdrawn.

In a series of phone calls from his home in Acton, West London, at the time, Qatada slammed America as "terrorists", accused Prime Minister Tony Blair of being a "liar" and denied knowing Osama bin Laden.

Talking through his interpreter, he said: "The governments in the United States and Britain are liars.

"They claim I have this money to discredit me for speaking out and I will fight their claims.

"I am not a terrorist and I do not have a link with terrorism. I have never met or spoken to Osama bin Laden."