Australian Federal Police is continuing its investigation into the case that has so far cost taxpayers almost USD 8 million nine months after charges against Haneef, 27, were dropped.

However, at a judicial inquiry in the case which started on Thursday it was revealed that Haneef would face 24-hour federal police surveillance if he returned to give evidence, the Courier Mail reported.

In the continuing fallout of the controversial case, Peter Russo, Haneef's lawyer who successfully defended the Bangalore medico, has split with his legal partners.

Russo attributed it to a ‘political’ clash with partners of Brisbane firm Ryan and Bosscher the state's biggest criminal law practice, the Mail said.

Russo, a defence specialist, gained worldwide recognition after steering Haneef to freedom after he was arrested at Brisbane Airport on July 2 last year as he was about to fly home to India.

Haneef was charged with recklessly helping a terrorist organisation after his SIM card was allegedly found with a cousin linked to the failed UK car bombings. The charges were dropped after he spent three weeks in detention but the government revoked his work visa on ‘character grounds’.

The Australian judiciary quashed the government directive and his visa was restored.

Russo said that the high-profile case meant "I wasn't really politically aligned with the firm any more".