Arrested during August raids as part of the immigration department's Project Thread "terror" probe, the men - all but one of them from Pakistan - were held while police investigated possible ties to the al-Qaida network.

But on Thursday police distanced themselves from suggestions of "terrorist" links.

"I don't think we ever have said that they were a security threat," said Royal Canadian Mounted Police spokeswoman Michele Paradis. "It's an immigration process."

Police seized 25 boxes of evidence and 30 computers in the raids. In one apartment, they say they found airplane schematics and pictures of guns on the wall.

Seven released

After nearly two months, seven of the 21 men have been released on bail while the rest remain in a maximum security prison just outside Toronto.

Another round of detention review hearings are slated to be held in two weeks. Ten of the men have made refugee claims.

"It was simply an issue of immigration and they turned it into a terrorist threat and that's very sad," said Wahida Valianti, national vice-president of the Canadian Islamic Congress. "Personally, I think in just trying to please the United States to some extent, we have become overly vigilant without really doing our homework first."

An Immigration and Refugee Board spokeswoman said that in admissibility hearings held so far, the men were turned down on the grounds they misrepresented themselves when they came to Canada.

"In the admissibility hearings, there's been no security grounds," the spokeswoman said.

Authorities allege the 21 men are connected to or obtained student permits from a defunct business school that sold fake registration letters allowing people to apply for visas.

Lawsuits

Lawyers for the detainees said the government had no case to begin with.

"Stigmatised is how he(flight student Anwar-ur-Rehman Muhammad)  feels. He's been branded as something that he never was"

David Orman,
Muhammad's lawyer

"All they have is egg on their face," said Muhammad Syed, who represented three of the men. "I think this was a fishing trip that went wrong (and) they're now just covering themselves for what will be, no doubt, lawsuits."

Among grounds cited for suspicion, officials said one man took an unusually long time to obtain a commercial pilots licence and his lessons took him directly over the Pickering nuclear plant near Toronto. Two other men allegedly associated with him were found before dawn outside the same power plant.

The alleged incidents invoked chilling memories of events leading up to the 11 September attacks on the United States in which the hijackers took lessons at US flight schools.

"My understanding is the security allegations against all of the individuals have not been followed through on," said David Orman, a lawyer for Anwar-ur-Rehman Muhammad who was released on a bond.

Muhammad, a pharmacist from Hyderabad, India, was the flight student.

"Stigmatised is how he feels. He's been branded as something that he never was," Orman said. "My concern is you have a situation where you can essentially be labelled a terrorist on such a low threshold."

Orman said Muhammad is considering his options and may seek anything from an apology to financial damages.