Pakistan's Supreme Court adjourned an appeal hearing today to decide whether to re-arrest the founder of a militant group said to have been behind the attacks on Mumbai last November.
Hafiz Saeed, who headed Lashkar-e-Taiba before moving to its charity front, was detained in the wake of the Mumbai attacks after a UN Security Council resolution put him on a list of people and organisations supporting al Qaeda.
The Lahore High Court, to India's frustration, freed Mr Saeed in June due to a lack of evidence against him. Pakistan has appealed against Mr Saeed's release, but ministers have said India should furnish proper evidence against him.
Peace talks between the nuclear armed rivals were suspended as tensions flared in the days after the Mumbai attacks, but last month they agreed to re-start dialogue, without resuming the peace process.
India wants Pakistan to punish the culprits for the slaughter of 166 people in Mumbai and dismantle the "infrastructure of terrorism".
India is also waiting for Pakistan to start in earnest the trial of five militants being held at Adiala jail in Rawalpindi for their alleged role in the Mumbai plot.
Charges have still to read against the suspects, and the next hearing has been put off until August 29th.
On Saturday, India gave Pakistan a new dossier of evidence to investigate the Mumbai attacks and to prosecute Mr Saeed.
Mr Saeed's lawyer, AK Dogar, said the court adjourned the hearing without fixing a new date because the government's prosecutor was not prepared for the case.
"The attorney general appeared before the court and said the previous government lawyer has resigned and he has all the records with, him so we're not in a position to argue the case," Mr Dogar told reporters after the hearing.
"Saeed will continue as a free man. He can move about and do whatever he likes," he said.
Saeed quit Lashkar in the days following the militant group's attack on the Indian parliament in December, 2001, but he stayed as head of the Jamaat-ud-Dawa (JuD), a charity that has been placed on both UN and US lists of terrorist organisations.
Lashkar was founded in 1989 to fight Indian rule in Kashmir, the flashpoint for more than 60 years of rivalry between India and Pakistan.
Security analysts say the group was a favoured tool of Pakistani intelligence, though those ties appeared to weaken after India and Pakistan embarked on a peace process in 2004.
Reuters