NEW YORK, 24 September 2004 — In a major setback for the Bush administration, a Saudi-American captured in Afghanistan is to be released from a military prison without facing any criminal charges and will be allowed to return home to Saudi Arabia.

The Bush administration took the first step Wednesday towards releasing the American-born “enemy combatant” whose case resulted in a landmark US Supreme Court defeat for the White House six weeks ago.

“A state of war is not a blank check for the president,” the court said.

Four months after telling the Supreme Court that holding Yaser Esam Hamdi in military confinement was crucial to national security and the war on terrorism, administration lawyers told a judge on Wednesday that they were negotiating arrangements for sending him back to Saudi Arabia.

The agreement to free Hamdi signals a walloping reversal in the hotly debated “test” case over the exact limits of the Bush administration’s powers regarding its hunt for suspected terrorists.

The Bush administration had labeled Hamdi an “enemy combatant” and denied him a chance to defend the accusations against him. He was held in solitary confinement at Guantanamo Bay in Cuba and recently at a Navy brig in South Carolina for more than two years. Due to the fact that officials had pointed to “national security concerns,” until recently Hamdi had been denied access to a lawyer.

In a statement Wednesday announcing the arrangement to free Hamdi, the Justice Department said: “Like many other enemy combatants captured and detained by US armed forces in Afghanistan who have been subsequently released, the United States has determined that Mr. Hamdi could be transferred out of United States custody subject to strict conditions that ensure the interests of the United States and our national security. As we have repeatedly stated, the Untied States has no interest in detaining enemy combatants beyond the point that they pose a threat to the US and our allies.”

Travel arrangements for Hamdi are still being worked out, but it is thought he will return back to Saudi Arabia on an American military aircraft as early as next week.

Frank Dunham, Hamdi’s lawyer, told journalists: “As long as they put him in civilian clothes and don’t put a bag over his head and give him some ice cream for the ride, I don’t care how they get him back there.”

“If all goes well, this is a huge victory for the rule of law,” Deborah Pearlstein, a lawyer for Human Rights First, told journalists. “The reality is that the Supreme Court handed the administration a huge defeat, and releasing Hamdi is one way of complying with that ruling.”

In June, the Supreme Court ruled that Hamdi, and others like him, must be given the opportunity to challenge their detention.

Hamdi was born in Louisiana in 1980 to Saudi parents. His father was working for an oil company in the US. His parents returned to Saudi Arabia while he was still a child, and he spent most of his life there.

Legal analysts and civil liberties advocates say Hamdi’s release highlighted weakness in the Bush administration’s rationale for locking up terror suspects. The ruling is expected to affect other suspects held in Cuba and elsewhere.

Anthony Romero, executive director of the American Civil Liberties Union told journalists: “This clearly shows that the government was not able to meet the burden of proof that the Supreme Court had set for it, and rather than risk further embarrassment in a failed prosecution, they’ve decided to just send him out of the country.

“The whole case makes you wonder why was he really being held in the first place,” said Romero.