'Significant mental stress'
The redacted paragraphs summarise an American account of Mohamed's treatment by US authorities before he was interviewed by a British intelligence agent in May 2002.
"It is clear from these seven paragraphs that our authorities knew very well what was happening to Mr Mohamed. Our hands are very dirty indeed"
They report that Mohamed had been "intentionally subjected to continuous sleep deprivation" and "threats and inducements were made to him".
"His fears of being removed from United States custody and 'disappearing' were played upon," the information says.
The interviews by US authorities, in which he was sometimes shackled, caused him "significant mental stress and suffering", it said.
The text said that the treatment would have been "in breach of the undertakings given by the United Kingdom in 1972" if administered in Britain.
"Although it is not necessary for us to categorise the treatment reported, it could readily be contended to be at the very least cruel, inhuman and degrading treatment by the United States authorities," it said.
David Miliband, Britain's foreign secretary, had argued that full disclosure of the information could lead to reduced intelligence-sharing with the US and
prejudice Britain's national security.
But in a statement following the ruling, Miliband said there would not be an appeal.
Lawyers for Mohamed said the decision was a "resounding victory for freedom of speech".
They had long claimed the secret paragraphs prove he was mistreated and that the US and British governments were complicit in his abuse.
Mohamed, 31, says he was tortured in Pakistan, and that interrogators in Morocco
beat him, deprived him of sleep and sliced his genitals with a scalpel.
He was later transferred to the US prison facility at Guantanamo Bay in Cuba before being released in February last year.
Shami Chakrabarti, the director of the rights group Liberty, said a "full and broad" public inquiry into British complicity in torture is needed in light of the information contained in the newly released paragraphs.
"It shows the British authorities knew far more than they let on about Binyam Mohamed and how he was tortured in US custody," she said.
"It is clear from these seven paragraphs that our authorities knew very well what was happening to Mr Mohamed. Our hands are very dirty indeed."
MI5 has said it did not know Mohamed was being tortured, or held in Morocco.