Authorities in Pakistan have claimed to have cracked a clandestine terror network set up by Ahmad Omar Saeed Sheikh, the jailed killer of American journalist Daniel Pearl.

The terror network was operating inside the Central Jail at Hyderabad in Sindh and the provincial government has suspended senior police and jail officials after a large number of cell phones, SIMs and other equipment were found in the prison, The News reported on Thursday.

Sheikh had also threatened to eliminate former President Pervez Musharraf [Images] by using a suicide car bomber.

India released Sheikh along with Jaish-e-Mohammad chief Maulana Masood Azhar and another terrorist in exchange for passengers on an Indian Airlines flight hijacked in 1999.

He had threatened Musharraf on his personal cell phone in the second week of November and planned to get him eliminated by a suicide bomber, interior ministry sources said.

The caller reportedly told Musharraf: "I am after you, get ready to die." Subsequent investigations revealed the call was made by someone from the Hyderabad central jail.

Being a suspect, Sheikh was placed under observation and it transpired that he was the one who had threatened Musharraf.

The report said authorities had learnt that Sheikh hatched a plot to assassinate Musharraf with the connivance of some Lashkar-e-Jhangvi militants with whom he had been in touch over phone.

The militants were monitoring Musharraf's movements to target him while he traveled between his Army House residence in Rawalpindi and his farmhouse at Chak Shehzad in the suburbs of Islamabad [Images].