The alleged mastermind of the 2008 attacks in Mumbai has been jailed in Pakistan for nearly six years on terror financing charges.

Hafiz Saeed is wanted by Washington and New Delhi for allegedly planning the 2008 attack on India’s financial capital, when 10 Islamist militants armed with assault rifles, hand grenades and other weapons killed 166 people and injured hundreds more.

Wednesday’s sentence was related to separate charges that his charity organisations, Jamaat-ud-Dawa (JuD) and Falah-e-Insaniat, are fronts for funding the militant group that he founded, Lashkar-e-Taiba (LeT).

Hafiz Saeed was found guilty of “being part of a banned terrorist outfit” and for “having illegal property”, his lawyer Imran Gill said.

The firebrand cleric is considered a global terrorist both by the United Nations and the United States, which put a $10m (£7.7m) bounty on his head.

Alice Wells, the top US diplomat for South Asia, hailed the conviction, which she said on Twitter was “an important step forward – both toward holding LeT accountable for its crimes, and for Pakistan in meeting its international commitments to combat terrorist financing”.

India has long said there is evidence that “official agencies” in Pakistan were involved in plotting the attack – a charge Islamabad denies.

Saeed has denied involvement, but has spent years in and out detention in Pakistan on various charges, sometimes under house arrest. For the most part he has been free to move around the country at will, enraging India which has repeatedly called for his prosecution.

His most recent arrest came in July last year. At the time, US president Donald Trump tweeted that he had been detained “after a 10-year search”, prompting derision from Pakistanis. The US House foreign affairs committee noted then that Saeed had been arrested and released eight times since 2001.

Islamabad, which is widely believed to use jihadist groups such as LeT as proxies against India, has been under international pressure to crack down on militancy.

Saeed’s jailing comes as Pakistan faces potential blacklisting by the Financial Action Task Force (FATF) – an anti-money-laundering monitor based in Paris – for failing to combat terror financing. “There was nothing to the case really, this was just due to pressure from the FATF,” Gill said.

The court’s judgment, seen by AFP, did not specify which banned terrorist group Saeed belonged to or clarify what was meant by “illegal property”, which can refer to money or other property. There was also no immediate comment from the JuD group and coverage of the sentence was muted on Pakistani news channels.