SYDNEY - A GOVERNMENT-ORDERED inquiry into the bungled case of an Indian doctor wrongly linked to attack plots in Britain last year has recommended tougher oversight of Australia's anti-terrorism laws.

In its 310-page report released on Tuesday, the inquiry found the Australian Federal Police had no intelligence to justify the arrest of Mohamad Haneef, who became a test case for tough counterterrorism laws introduced after the Sept 11 attacks.

Dr Haneef, 29, was working in Queensland state as a doctor when he was arrested by federal police as he tried to board a one-way flight to India. The arrest came days after one of his cousins allegedly drove an explosive-laden SUV into Scotland's Glasgow airport in a suspected terrorist attack.

Police said they thought it was suspicious that Dr Haneef had bought a one-way ticket. Dr Haneef told police he was rushing to see his sick newborn daughter in Bangalore and planned to return.

He was held without charge for 12 days under anti-terror laws before being charged with providing support to a terrorist organisation. The charges were later dropped, but his visa was still revoked.

Dr Haneef's ordeal triggered a political storm about whether the former conservative government and the federal police were deliberately fueling terrorism fears.

'I could find no evidence that he was associated with or had foreknowledge of the terrorist events,' former New South Wales state Supreme Court judge John Clarke wrote in the report released on Tuesday.

The terrorism charge was based on Dr Haneef giving his cell phone SIM card to his cousin Sabeel Ahmed, one of the men accused in the attempted bomb attacks.

The charge was dropped when it was revealed that Dr Haneef's SIM card had not been found in the Glasgow attack vehicle, as a prosecutor had claimed.

But with elections looming, then-Immigration Minister Kevin Andrews revoked Dr Haneef's visa saying he was not of good character.

Critics said Andrews was making Dr Haneef a scapegoat to burnish the government's security credentials.

The court eventually ruled Dr Haneef's visa should be reinstated.

After winning the election, new Prime Minister Kevin Rudd's government ordered Mr Clarke's inquiry.

In the report, Mr Clarke said while Mr Andrews was entitled to revoke Dr Haneef's visa, his decision to do so was 'mystifying'.

Mr Andrews on Tuesday defended his actions, saying Australians expected him to act in the case.

Mr Clarke recommended Australia's anti-terrorism laws be independently reviewed and that a case management system for major police investigations be developed.

Attorney General Robert McClelland said the government would adopt all of the report's recommendations.

'Clearly there were errors made at a number of levels - including at the highest level,' Mr McClelland told reporters in Sydney.

In a conference call from the United Arab Emirates, where he now lives, Dr Haneef told reporters he was pleased with the findings.

'It is a very clear finding that I am totally innocent of the matters alleged against me last year,' said Dr Haneef, who is considering pursuing compensation from the government.

The federal police welcomed the findings, but defended its officers in a statement saying their actions were taken in 'good faith and in the best interests of public safety given the circumstances at the time'.

The inquiry cleared Australia's previous conservative government of any wrongdoing and concluded there was no political motivation behind Haneef's arrest.

Mr Peter Russo, one of Dr Haneef's lawyers, said he was troubled the inquiry didn't assign accountability for the bungled investigation.

'I'm a bit cynical about the interaction between the different agencies and the politicians,' Mr Russo said. -- AP