A three-judge bench at Pakistan's supreme court headed by Justice Nasir ul Mulk rejected the appeals and upheld the June 2009 order from the Lahore high court.

AK Dogar, the defence lawyer, said: "The prosecution has failed to prove its case."

'Mere assumption'

Dogar quoted the short order from the court as saying: "We cannot usurp the right of freedom of a person on mere assumption."

Saeed Yousaf, the Punjab prosecutor involved in the provincial appeal, said: "We tried our level best on the basis of the documents available."

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Pakistan put Saeed and three other Jamaat-ud-Dawah leaders under house arrest in December 2008, a month after the Mumbai attacks, and publicly shut their offices after the UN Security Council blacklisted the organisation as a "terror group".

Tuesday's ruling was met with disappointment in India, with whom Pakistan wants to resume peace talks.

"We regard Hafiz Saeed as one of the masterminds of the Mumbai attacks and he has openly urged jihad [holy war] against India," Nirupama Rao, India's foreign minister, said in New Delhi on Tuesday.

"Enough evidence has been given by India to Pakistan on the role and activities of Hafiz Saeed."

Rao said Pakistan should take "meaningful action" against him to fulfil its pledge not to harbour fighters.

In an interview with Al Jazeera conducted in Lahore in February, Saeed described the allegations against him of plotting attacks in India as baseless.

"India always indulges in propaganda and has always fabricated false reports about me and that's how India has been able to use international pressure against us," he said.

Alleged masterminds

The November 2008 siege of Mumbai, India's financial capital, left at least 166 people dead and hundreds more wounded.

India sentenced the sole surviving attacker, Pakistan's Mohammed Ajmal Amir Kasab, to death on May 6.

India wants Pakistan to convict the alleged masterminds of the assault and sees Jamaat-ud-Dawah as a front for the Lashkar-e-Taiba.

Two operatives of the Lashkar, Zakiur Rehman Lakhvi and Zarar Shah, are currently on trial in Pakistan in connection with the Mumbai attack.

Manmohan Singh, the Indian prime minister, said on Monday that renewed efforts were being made to restart full peace talks.

The Indian and Pakistani foreign ministers are scheduled to meet in Islamabad on July 15 as part of efforts to revive the abandoned talks.