Australia has dropped charges against Mohamed Haneef (pictured) -- an Indian doctor accused of involvement in failed British car bombings -- and released him from custody, admitting mistakes were made rushing the case to court. (Xinhua/AFP Photo)

    CANBERRA, July 27 (Xinhua) -- An Indian doctor who was arrested in Australia and charged with supporting terrorism was freed from prison Friday night after public prosecutors decided to drop charges against him due to lack of evidence.

    Mohammed Haneef is at a residential address in Brisbane, the capital of the state of Queensland, after leaving the Wolston Correctional Center in the city's south-west Friday night, Australian Associated Press reported.

    The 27-year-old, who has been working in Australia since last year, was arrested on July 2 in connection with the foiled terror attacks in Britain and was charged with supporting a terrorist group.

    He was granted bail on July 16, but hours later Australian Immigration Minister Kevin Andrews announced Haneef had had his visa canceled and would be taken into immigration detention.

    On Friday afternoon, Australian Commonwealth Director of Public Prosecutions Damian Bugg announced to drop the terror charge against the Indian doctor following a review of the case.

    Meanwhile, Andrews said on Friday that he had decided to release Haneef into residential detention while advice was sought from the commonwealth solicitor-general on the implications of the dropping of the charge against him.

    Haneef was moved under tight security from the Wolston Correctional Center, where he was held in isolation, to an Immigration Department building in Brisbane's CBD.

    From there he was taken to an undisclosed Brisbane residence where he is expected to remain while the immigration minister decides whether to reinstate his work visa.

    Andrews said that while under residential detention, Haneef would be free to move about in the community but would have to report to the Immigration Department by phone every day.

    Australian Foreign Minister Alexander Downer said Friday that he had spoken to the Indian External and Health Ministers about the issue during the past week and that he did not expect the latest developments to harm ties with New Delhi.

    "I think our relationship with India is a good and strong relationship and I don't think this will have any bearing on our relationship with India," Downer said in Perth, the capital of the state of South Australia.

    "My view about it is that the Indians have the same sort of common law legal system that we have and they understand the procedures," he said.

    Australian Attorney-General Philip Ruddock also said it is regrettable that charges were ever laid against Haneef.