The true depth of British involvement in the torture of terrorism suspects overseas and the manner in which that complicity is concealed behind a cloak of courtroom secrecy was laid bare last night when David Davis MP detailed the way in which one counter-terrorism operation led directly to a man suffering brutal mistreatment.

In a dramatic intervention using the protection of parliamentary privilege, the former shadow home secretary revealed how MI5 and Greater Manchester police effectively sub-contracted the torture of Rangzieb Ahmed to a Pakistani intelligence agency, the Inter-Services Intelligence Directorate (ISI), whose routine use of torture has been widely documented.

This is the first time that the information has entered the public domain. Previously it has been suppressed through the process of secret court hearings and, had the Guardian or other media organisations reported it, they would have exposed themselves to the risk of prosecution for contempt of court.

Davis told MPs that although sufficient evidence had been gathered to ensure Ahmed could be prosecuted for serious terrorism offences, he was permitted to fly from Manchester to Islamabad, the Pakistani capital, in 2006 while under surveillance. He then detailed the way in which the British authorities:

• Tipped off the ISI that Ahmed was on his way.

• Told the ISI he was a terrorist and suggested that he should be detained.

• Were aware of the methods used by the ISI while questioning terrorism suspects.

• Drew up a list of questions for the ISI to put to Ahmed.

• Questioned him themselves after he had been in ISI custody for around 13 days.

The officers from MI5 and MI6 who interrogated Ahmed should have known his detention was unlawful because he had not been brought before a court. Ahmed says he told these officers he was being tortured and that signs of his mistreatment would have been evident.

He says he was whipped, beaten, deprived of sleep and sexually humiliated. At one point three fingernails were ripped out of his left hand. He says this was done slowly, over a period of days, while he was being asked questions which he believes were handed to the ISI by British and US authorities.

Addressing the Commons last night, Davis said: "A more obvious case of outsourcing of torture, a more obvious case of passive rendition, I cannot imagine. He should have been arrested by the UK in 2006. He was not. The authorities knew he intended to travel to Pakistan, so they should have prevented that. Instead, they suggested the ISI arrest him. They knew he would be tortured, and they organised to construct a list of questions and provide it to the ISI."

Ahmed was deported to the UK after 13 months in Pakistani custody, prosecuted largely on the basis of evidence gathered before he had travelled to that country, and jailed for life after being found guilty of membership of al-Qaida and directing a terrorist organisation. The jury at Manchester crown court was not told he had been tortured, and some details of the police and MI5 counter-terrorism operation that resulted in his torture would have been heard in camera, before his trial began and after the media and the public had been excluded from court.

Yesterday the Guardian reported that Ahmed alleges he was recently visited by an MI5 officer and a police officer who said they could arrange for his sentence to be reduced, or for him to be paid money, if he withdrew his complaints about torture during his forthcoming appeal and during civil proceedings in which he is suing the British government. Davis said if this claim was true it was "frankly monstrous".

Ahmed is one of several British citizens and residents who have alleged British complicity in their torture in Pakistan, Bangladesh, Egypt and the UAE during the so-called war on terror.

Davis told MPs : "For each case, the government has denied complicity, but at the same time fiercely defended the secrecy of its actions which has made it impossible to put the full facts in the public domain, despite the clear public interest to doing so."

Ahmed, he said, "was astonishingly not arrested but was allowed to leave the country … the British intelligence agencies wrote to their opposite numbers in Pakistan, the ISI, to suggest that they arrest him". Davis went on: "The intelligence officer who wrote to the Pakistanis did so in full knowledge of the normal methods used by the ISI against terrorist suspects that it holds."

Davis said Ahmed was "viciously tortured by the ISI. He [Ahmed] claims among other things, he was beaten with wooden staves, the size of cricket stumps,whipped with a three-foot length of tyre rubber and had three fingernails removed from his left hand. There is a dispute between British intelligence officers as to exactly when his fingernails were removed, but an independent pathologist confirmed it happened during the period when he was in Pakistani custody."

Davis called on ministers to examine the in camera sections of legal argument before Ahmed's trial and all relevant police and intelligence agency records; publish current guidelines on interrogation of detainees held overseas; and establish if any intelligence officer was disciplined.

"The judge in the court case intimated that disciplinary action should be considered. Was this done? If not, why not?"

Davis also said there was a pressing need for an inquiry into Britain's involvement in torture. "The Americans have made a clean breast of their complicity, whilst explicitly not prosecuting the junior officers who were acting under instruction. We have done the opposite. As it stands, we are awaiting a police investigation which will presumably end in the prosecution of frontline officers. At the same time the government is fighting tooth and nail to use state secrecy to cover up both crimes and political embarrassments, to protect those who are the real villains of the piece, those who approved the policies in the first place."