Bashir and at least 18 others convicted in the 2002 Bali attack that killed 202 people had their sentences reduced on Wednesday, and one other freed along with thousands of other inmates, as part of Indonesia's Independence Day celebrations, prison wardens said.
The sentence reductions were likely to anger Australia. Government ministers have said they believe Bashir's original sentence was too short and have indicated that a formal protest might be lodged if his sentence was reduced.
Canberra and Washington say Bashir is the spiritual head of Jemaah Islamiyah, an al-Qaida-linked group blamed for a series of deadly attacks in Indonesia in recent years, and for plotting against Western targets there and in other parts of Southeast Asia.
Bashir, a cleric who denies any terrorist links but has expressed admiration for Osama bin Laden, was convicted in March of conspiring in the 12 October 2002 near-simultaneous bombings of two crowded nightclubs in Bali, which killed mostly foreign tourists.
The sentence reduction coincided with Bashir's birthday on Wednesday, when he turned 67. The Supreme Court recently rejected his appeal.
"Here we consider prison sentences as a way to rehabilitate inmates -not as revenge"
Mohammad Mahendratta, lawyer for Abu Bakar Bashir
Dedi Sutardi, the chief warden at Cipinang Prison in Jakarta where Bashir is being held, said the cleric would have his sentenced reduced by 4 1/2 months.
One other Bali bomber was freed and 18 -all of whom were originally sentenced to up to 16 years- were given three-month reductions, according to a warden and Paulus Sugeng, a Justice and Human Right Department official.
He had no information about the freed inmate. It is a tradition in Indonesia that on national holidays prison terms are cut for some of the country's 105,000 inmates who exhibit good behaviour. Only those sentenced to death or life in prison are excluded.
Rehabilitation, not revenge
"This is a basic right of all prisoners in Indonesia, including Bashir," said Mohammad Mahendratta, the cleric's lawyer. "Here we consider prison sentences as a way to rehabilitate inmates -not as revenge."
Thirty-four people have been convicted in the Bali bombings. Five in the Kerobokan jail, including accused mastermind Imam Samudra, were excluded from the reductions because three were sentenced to death and two others for life in prison.
The Bali bombings in 2003 killed
Samudra yelled to television reporters that until Indonesia became an Islamic state, it should not celebrate independence.
"We are not independent," he shouted. "If we were independent we would have Islamic law."
It was not immediately clear if nine other Bali bombers in jails elsewhere in Indonesia would also have their sentences cut.
Jemaah Islamiyah is suspected in several other deadly attacks, including the 2003 JW Marriott hotel bombing in Jakarta that killed 12 people, and the September 2004 Australian Embassy bombing that killed 11.