In an embarrassment to the Australian government, the federal court on Friday restored the work visa of Indian doctor Mohammad Haneef, nearly five months after he was exonerated of terror charges in connection with the failed United Kingdom car bombings.

27-year-old Haneef, who is now free to work in Australia, is pleased to have cleared his name, but is yet to decide whether to return from India, his lawyer Peter Russo said.

"I don't think Haneef wants to put himself in the position where his wife would have to go through the trauma that she went through when he was first detained," he said.

Immigration minister Chris Evans, whose predecessor Kevin Andrews had cancelled the Indian doctor's work visa on character grounds, said, "I formed the judgement that there was no basis for me to seek a move to cancel Haneef's visa. Haneef is entitled to return to this country and take up employment in accordance with his visa".

The full bench of the federal court, in a 'unanimous' decision, dismissed a government petition challenging Justice Jeffery Spender's ruling in August in favour of the medico from Bangalore and directed that litigation costs be paid to him.

Haneef, who spent nearly four weeks in custody after his arrest from Brisbane airport on July 2 when he attempted to board a flight to India, had challenged the cancellation of his work visa.

Haneef, who had returned to India on July 29 and is currently on pilgrimage to Mecca, has insisted that his legal battle was aimed at clearing his name.

"It is a double Eid for us today," an emotional Ashfaq Ahmed, father-in-law of Haneef, said in Bangalore.

"Today's Bakrid is special for us. Early morning we got the good news about Haneef's work visa. Our family is very happy," he told PTI.

Welcoming the federal court verdict, Premier of the Queensland, Anna Bligh, said she would be pleased to have the Indian doctor in the state hospital.

"The decision by the court in relation to Haneef's visa adds weight to concerns that all may not have been as it should have been in the dealings the Commonwealth government had with Haneef," she was quoted as saying by The Australian newspaper.

Bligh said Haneef was considered a competent doctor in his time with the Queensland Health.

However, as his registration in Queensland lapsed in September, Bligh said it would need to be renewed, and other visa requirements met, before he could return to work.

Jeff Hollywood, Manager of Gold Coast hospital where Haneef used to work prior to his arrest on July 2, said though the Indian medico had been replaced, he would be welcome to apply for upcoming positions. "We welcome his expertise and training," he said.

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