A Pakistan court on Friday cancelled a detention order against the alleged mastermind of the 2008 Mumbai attacks potentially paving the way for his release, prompting outrage in New Delhi.
It is the latest round in a tussle over Zaki-ur-Rehman Lakhvi, accused over the terror siege that left 166 dead, which has worsened already strained ties with India.
The latest ruling means Lakhvi could be released as early as Saturday, though the government can still appeal to the Supreme Court.
For now he remains in jail, but India is infuriated over his possible release.
"If such a person, who is also a designated international terrorist by the United Nations, is released it will pose a threat that cannot be ignored," India's foreign ministry spokesman Syed Akbaruddin said in a statement late Friday, adding that his government has "conveyed its outrage" to Pakistan.
Lakhvi was granted bail by an anti-terror court in December, but quickly slapped with a detention order under public order laws.
The Islamabad High Court suspended that order, only for the Supreme Court to reinstate it in January.
On Friday the high court once again set aside the detention order, senior government lawyer Jehangir Jadoon told AFP.
A detailed order handed down by the court said government lawyers had failed to provide evidence to justify Lakhvi's detention.
Throughout the three-month back and forth over Lakhvi's detention, he has never been let out of Adiyala Prison in Rawalpindi.
The original bail order in December prompted an angry response from Indian Prime Minister Narendra Modi, who said it came as "a shock to all those who believe in humanity".
Pakistan has long been accused of playing a "double game" with militantsm supporting groups it thinks it can use for its own strategic ends, particularly in disputed Kashmir.
Releasing Lakhvi would violate "Pakistan's professed commitment to combat terrorism, including its recently stated policy of not differentiating amongst terrorists", Akbaruddin said Friday.
- Double game? -
The Mumbai attacks were blamed on banned Pakistani militant group Lashkar-e-Taiba (LeT). India has long seethed at Pakistan's failure either to hand over or prosecute those accused of planning and organising the violence.
Lakhvi and six other suspects have been charged in Pakistan but their cases have made virtually no progress in more than five years.
Delhi accuses Islamabad of prevaricating over the trials, while Pakistan has claimed India failed to hand over crucial evidence.
The horror of the Mumbai carnage played out on live television around the world, as commandos battled the heavily armed gunmen, who arrived by sea on the evening of November 26, 2008.
It took the authorities three days to regain full control of the city and New Delhi has long said there is evidence that "official agencies" in Pakistan were involved in plotting the attack.
Islamabad denies the charge but LeT's charitable arm Jamaat-ud-Dawa (JuD), seen as a front for the militant group, operates openly in the country.
LeT founder Hafiz Saeed leads a high-profile life in Pakistan despite a $10 million (9.5 million euro) US government bounty offered for his capture, regularly appearing on TV and addressing large public gatherings of his followers.
Maulana Abdul Aziz Alvi, the head of the Kashmir chapter of JuD, welcomed the court's decision.
"It is a victory of truth which has a very positive impact on the judicial system of Pakistan," Alvi said.
Lakhvi's bail order came just days after a Taliban massacre at a school in northwest Pakistan, an outrage that prompted Prime Minister Nawaz Sharif to say Pakistan would not distinguish between "good Taliban and bad Taliban".
Pakistan and India both control part of Kashmir but claim the whole of the territory and have fought two of their three wars over it since independence from Britain in 1947.
Source: AFP