By M Ilyas Khan
BBC News, Islamabad
Mr Saeed formed Lashkar-e-Taiba in the early 1990s
The founder of the Pakistani-based Lashkar-e-Taiba militant group is a free man after the High Court in Lahore ordered his release, in spite of the apparent efforts of the Pakistani government to keep him under detention.
Hafiz Mohammad Saeed was put under house arrest on 11 December 2008 when the United Nations declared his controversial Islamic charity, Jamaat-ud-Dawa, to be a front for Lashkar.
The sanctions came days after the November 2008 Mumbai (Bombay) attacks which the Indian government blamed on Lashkar.
India's position was vindicated when the Pakistani government later acknowledged that "part" of the conspiracy to attack Mumbai did take place on its soil, and that Lashkar had been involved.
It made several arrests in connection with the attacks, but no criminal charges were brought against Mr Saeed.
Mr Saeed's supporters are celebrating
Instead, he was detained under the Maintenance of Public Order (MPO) law which lawyers say empowers the government to arrest individuals who are likely to disrupt public order.
The law allows such detentions only for a limited period, and courts often set aside prolonged detentions under the MPO.
This is the second time since 2006 that a court has ordered Mr Saeed's release from detention under the MPO law.
In August 2006, he was detained for activities which the government said were "detrimental" to its relations with other governments. The court ordered his release in December that year.
Significantly, both these detentions came at a time of mounting international pressure on Pakistan to reign in Lashkar.
On both occasions, the government arrested Mr Saeed but brought no criminal charges against him.
Pakistan's actions against the group as a whole have also been rather tentative, apparently taken under outside pressure.
It proscribed Lashkar in January 2002 after the US put it on its list of terrorist organisations.
Likewise, it proscribed Jamaat-ud-Dawa in December 2008 after the UN imposed sanctions on the charity.
This raised eyebrows in Pakistan where the links between the militant and social welfare wings of some groups are often not clear.
Since 9/11, some organisations banned by the US or Pakistan have continued to operate under different aliases, portraying themselves as welfare rather than militant outfits.
In some cases it appears that the authorities have turned a blind eye when militant groups have simply renamed themselves and continued operating as before.
Mr Saeed has always identified himself with the Kashmir dispute
The Lashkar-e-Taiba/Jamaat-ud-Dawa combination would appear to be one such case.
Lashkar-e-Taiba was an offshoot of Jamaat-ud-Dawa wal-Irshad, a preaching, publishing and propaganda network set up by Hafiz Saeed for jihad (holy war) in Afghanistan in 1985.
Abdullah Uzzam, a Palestinian scholar and one of the earliest Arab ideologues of jihad in Afghanistan, was a co-founder.
Mr Saeed raised Lashkar as the militant wing of the organisation in the early 1990s, when many militant groups started shifting from Afghanistan to Kashmir after the Soviet Union had pulled out of Afghanistan.
Subsequently, Lashkar's rise as a major Pakistani group operating in Kashmir is widely credited to Mr Saeed's close links with the Pakistani military and the intelligence services.
The group also had access to huge funds from Middle Eastern mosques and a countrywide network to raise donations locally.
After 9/11, the group came under increasing international pressure, principally because of its involvement in some high-profile attacks in Indian-administered Kashmir and cities in India.
The Indians blamed the group for attacks in Mumbai and Delhi in 2003, 2005 and 2008.
It was also named in connection with armed raids on Delhi's Red Fort in December 2000 and on the Indian parliament a year later.
Days before Lashkar was proscribed by former Pakistani President Pervez Musharraf in January 2002, Hafiz Saeed revived the group's parent organisation, Jamaat-ud-Dawa wal-Irshad, and amended its name.
The Mumbai attacks left more than 170 people dead
The name of Lashkar-e-Taiba was replaced with that of Jamaat-ud-Dawa, as it is now called, on the signboards of the group's offices and recruiting centres around Pakistan.
But there was no significant change in the nature of its activities.
Their offices continued to recruit fighters for militant training camps occupied by Lashkar-e-Taiba in Pakistani-administered Kashmir.
The presence of militants in those camps made it possible for them to start early rescue missions in the aftermath of the earthquake that hit the Kashmir region in October 2005.
That enabled the Musharraf government to portray Dawa as an efficient relief organisation working closely with the Pakistan army as well as UN agencies in the quake-hit areas.
Since it was banned, Lashkar-e-Taiba has experienced some defections from its ranks by elements not happy with Pakistan's policy of easing tensions with India.
But independent observers believe the bulk of the organisation has remained united under the clandestine leadership of Hafiz Saeed.
These observers also point out that Lashkar has remained more loyal to Islamabad's policies than other militant groups, and has remained comparatively more focused on India.
For this reason, the group has become unpopular with militant factions fighting the Pakistani army in Swat and the tribal region.
Many also suspect Mr Saeed and other Dawa leaders of having played a role in the 2002 arrest of some top al-Qaeda operatives in Pakistan.
These operatives, including a top al-Qaeda leader, Abu Zubaydah, were arrested from a Lashkar safe house in the city of Faisalabad.