Ivan Lewis, the foreign office minister, said the government was clear in its opposition to torture.
"It is an abhorrent crime and we are fundamentally opposed to it. That principle guides all the government's work, including the intelligence services and the armed forces," Lewis said.
Ahmed, a British national, was allowed to travel to Pakistan in 2006, even though he was suspected of involvement in terrorism offences and was under surveillance by British police.
The ISI was alerted, Davis said, and its agents detained Ahmed, who was beaten and tortured, including having three of his fingernails extracted during 13 months in custody.
British agents also questioned him during that time and supplied questions to the ISI for the interrogations, Davis said.
"He should have been arrested by the UK in 2006. He was not. The authorities knew that he intended to travel to Pakistan, so they should have prevented that. Instead, they suggested the ISI arrest him.
"They knew he would be tortured, and they organised to construct a list of questions and provide it to ISI," Davis said.
Ahmed was eventually returned to Britain and jailed for life last year after being found guilty of membership of al-Qaeda and directing a terrorist cell. He is currently appealing his conviction.