Cerie Bullivant said he had been to "the depths of despair"
The High Court says it has quashed a control order against a convert to Islam because MI5 had no case the man wanted to fight overseas.
Cerie Bullivant, 25, of east London, was cleared of absconding from the counter-terrorism measures last year - but immediately put under a new order.
Mr Justice Collins told the High Court MI5 had shown "no reasonable suspicion" Mr Bullivant was a security risk.
The Dagenham man had told the court his life had been destroyed by the order.
'Guilt by association'
In a week-long court battle last month, MI5 accused Mr Bullivant of posing a terrorist threat and planning to go abroad to fight.
But his lawyers argued the accusations against him were "baseless" and that he was the victim of an abuse of power.
At the end of the hearing, Mr Justice Collins told Mr Bullivant the control order made last year would be quashed. On Friday, he returned to court to give his reasons for the ruling in full.
In his judgement, the judge said it may have been reasonable to assume that individuals with whom Mr Bullivant openly associated might have been involved in terrorist activities.
But that did not make it reasonable to suspect that he had the same inclinations. He said: "The dangers of guilt by association are obvious."
Mr Bullivant was first subjected to a control order in 2006 over alleged plans to travel to Syria or Bangladesh to fight with Islamist extremists.
Outside court, Mr Bullivant said it had wrecked his marriage and made him mentally ill.
"Since the imposition of the first control order in June 2006, I have been subjected to the most extreme pressures which have thrown my life into turmoil," he said.
"As a direct result of the imposition of the order, my wife has left me and my family and friends have become deeply distressed.
"Although I am very happy that this order has now been lifted, this draconian process and legislation is still continuing to ruin the lives of others and their families."
Shadow home secretary David Davis said: "We warned the government at the time this legislation was going through about the flaws in this system.
"This demonstrates the urgent need for a properly thought-through mechanism to deal with these suspects, one that is both practically effective and legally robust."
His call was echoed by Liberal Democrat home affairs spokesman Chris Huhne, who said control orders "violated the basic legal principle that we are innocent until proven guilty".
He added: "Control orders are a danger both to justice and to security since they alienate precisely those communities on whom we must rely for information and co-operation in tackling terrorism."
Police minister Tony McNulty said he was disappointed the order had been quashed.
He said: "The ruling will not affect any other control orders, all of which remain in force.
"For those we cannot prosecute or deport, control orders are the best available option for managing the risk to the public posed by suspected terrorists."
He also said he welcomed Mr Justice Collins' acknowledgment that the Secretary of State's decision to make a control order was justified on the material available at the time.