Australian Federal Police (AFP) officers arrested Mohamed Haneef in July 2007 and held him for 11 days without charge after his mobile phone SIM card was found on one of the people blamed for the botched Glasgow airport attack.

Haneef, who worked for a hospital in the Queensland state, was later charged with providing support for a terrorist organisation, but the charges were eventually dropped and Haneef was allowed to return to his family in India.

The bungled terrorism case became a test case of Australia's terrorism laws and is currently subject of a judicial enquiry, with police, intelligence agencies and prosecuting authorities blaming each other for foul-up.

"The AFP has concluded its active inquiries," police said in a statement late on Friday, adding Haneef was no longer a person of interest to them. "At the present time, there is insufficient evidence to institute proceedings against Dr Haneef for any criminal offence."

Australia's domestic intelligence agency ASIO has told the inquiry it had no evidence to link Haneef to the Glasgow attack.

Haneef, now living in the United Arab Emirates, said he hoped to one day return to Australia, but said his family was still coming to terms with what happened in Australia.

"It has left the whole family in darkness, this episode. Just because of some, I don't know, some foolish mistakes from some person," Haneef told the Australian newspaper.

Haneef's lawyers have said they will be seeking compensation and a full apology from the Australian Federal Police.

Australia has gradually tightened its anti-terror laws since the Sept. 11, 2001 airliner attacks on the United States. Its new terrorism laws allow police to detain and question a suspect without charge for extended periods.