A charity helping Palestinians listed in the US as a "specially designated global terrorist organisation" has been cleared of having links to Hamas by a British charity watchdog.
The Charity Commission closed its inquiry into British charity Interpal after American authorities were unable to provide evidence to support the allegations.
The charity's assets were frozen by the Commission and an investigation launched after it was cited by President George Bush as one of five Europe-based groups raising money for Hamas
The US Treasury Department froze US-based assets of the five groups following last month's suicide bombing on a Jerusalem bus which left 20 dead and for which Hamas claimed responsibility.
Ibrahim Hewitt, chairman of the charity, which provides aid to Palestinians in the West Bank and Gaza strip, Jordan and Lebanon, said: "Obviously we are delighted that the whole thing is over and the cloud that was hanging over us has been lifted.
"But it is disturbing that allegations like this can be made that are unsubstantiated. We may have been cleared by the Charities Commission but we are still on the Americans' list, we are not out of the woods completely."
The Muslim Council of Britain (MCB) met Foreign Secretary Jack Straw earlier this month to seek assurances that Britain would not bow to US pressure to take action against the charity.
At the time the council accused the Government of taking "precipitate" action against Interpal at the instigation of the US.
MCB general secretary Iqbal Sacranie said: "It would have been appropriate if the Charity Commission had obtained the evidence first before taking any action. Needless to say the both the charity and its beneficiaries have suffered because of the asset freeze.
"It is seriously disturbing that you have a state making such allegations with no basis and taking action as a result."
Simon Gillespie, director of operations at the Charity Commission, said: "As the independent charity regulator it is our duty to look into serious allegations about charities' links to terrorism.
"At the same time, we must have sufficient evidence to warrant an inquiry continuing. We have moved swiftly to reach a conclusion on this case because of the possible adverse impact of our actions on the charity's beneficiaries."
PA