Haneef remains under probe: Aus police

"Haneef remained under investigation", a spokesperson for Australian Federal Police said.

Clearing the decks for Haneef's return, the Australian government on Wednesday decided not to appeal against the reinstatement of his visa by the Federal Court.

"The investigation into Operation Rain is continuing," the spokesperson said, referring to the name of the police investigation into the case.

"We are unable to make any further comment," she was quoted as saying by a TV channel.

The 27-year-old Bangalore medico was wrongly accused of links to the failed UK terror plot six months ago and forced to leave the country.

The Federal Court had restored Haneef's work visa on December 21 after he was exonerated of the terror charges.

The Federal Labor Government has pledged to hold an inquiry into the handling of Haneef's case.

A spokesman for Attorney-General Robert McClelland said on Wednesday that arrangements for establishing the inquiry were still being considered, including its timing.

Haneef's work visa was cancelled by the then Immigration Minister Kevin Andrews on character grounds because of his relations with UK terror suspects Sabeel and Kafeel Ahmed, soon after he was granted bail by a court.

The court's decision means Haneef will be able to return to Australia to work under the conditions of his current 457 day Temporary Long Stay visa should he wish to do so.

Haneef's barrister, Stephen Keim SC, said he had informed the doctor in an email about the Rudd Government's latest decision.

"I'm sure that Haneef and his family will be relieved that a further step has been taken in putting behind them the events which disrupted their lives in July, 2007, and thereafter," he said.

Haneef's Brisbane solicitor, Peter Russo, asked the AFP to declare, publicly, that they have completed their probe into the case and that they do not intend to take any further action concerning him.

Russo said that the AFP now had more than six months to complete their investigations.

Meanwhile, The Australian reported on Thursday that Haneef's friend Asif Ali, who was sacked last year by Queensland health authorities for lying about his qualifications, is also under investigation for possible links to terrorism.

The investigation followed the discovery of suspicious documents, images and videos on his personal computer.

Ali's Brisbane-based lawyer, Neil Lawler, confirmed that AFP officials discovered emails to and from suspects in last year's failed car bomb attacks in Glasgow and London, along with other incriminating material, when they searched Asif Ali's computer as part of their probe into Haneef last July.

Lawler, who maintains Ali is a "gentleman in the proper sense of the word" with no links to terrorism, said the material appeared on his hard-disk because it had been shared with friends while Ali and Haneef were living in a house with other Indian doctors in Liverpool in 2006.

"It was reasonably damning because the emails were on my client's computer," Lawler was quoted as saying.

"But it had been a communal computer when they were living in a communal house. There was good evidence that Ali was known to terrorists and knew them, because of the shared accommodation. But there was no evidence that he had any knowledge of their activities," he said.

Lawler said other material on Ali's computer that attracted the attention of AFP officers included about 30 photos of handguns and "really crude instructions" for making bombs.

Other sources told the daily that the computer also contained photographs of cars of the same make and model as used in a failed attack in London in June last year.