The UK government has removed a “defunct” Al Qaeda-linked Libyan group from a list of terrorist organisations just 18 months after it was forced to apologise for handing over a former leader to the regime of Col Muammar Qaddafi.

The Libyan Islamic Fighting Group (LIFG) was a “brutal terrorist organisation” but was disbanded in 2010-11 during the final days of the Qaddafi regime and was no longer concerned in terrorism, according to the UK government.

The decision was only the fourth time that a terrorist organisation has been taken off the list since terrorist laws to ban international groups were introduced in 2000. It ends the threat of a ten-year jail term for members of the organisation.

The group was headed by Abdul Hakim Belhaj who secured an apology from the UK government last year after he was snatched in a CIA-led operation in southeast Asia in 2004 based on intelligence supplied by the UK.

He was held in a Libyan jail for six years where he was questioned by UK officials and also suffered from torture. The British government said that “we sincerely regret our failures” after refusing for years to apologise for its role in his rendition.

The LIFG was proscribed by the UK in 2005, the year after the “deal in the desert” between UK prime minister Tony Blair and Col Qaddafi, who agreed to end his sponsorship of terrorism in return for renewed diplomatic ties.

The decision to remove the group from the list of 74 international terrorist organisations followed an application in January from the group or an individual affected by its proscription. The government declined to say who made the application or details of the intelligence used for its assessment.

The application came in the same month that Libya’s attorney general issued an arrest warrant for Mr Belhaj, a politician now based in Turkey, accusing him of involvement in the massacre of 141 soldiers and civilians loyal to Field Marshal Khalifa Haftar in 2017. Mr Belhaj had rejected the accusations and said it was an attempt to remove him from the political scene.

British lawyers for Mr Belhaj declined to comment on the application saying they had not acted for him since the UK apology in May last year.

Human rights group Reprieve, which worked with Mr Belhaj and has campaigned against the use of illegal rendition, said it was not aware of the application.

Professor Clive Walker, of Leeds University and an expert on terrorism laws, said: “One might wildly speculate that the UK government’s settlement with Abdul Hakim Belhaj in May 2018 concerning his extraordinary rendition and torture which had implicated UK agencies, and then the arrest warrant for him issued by the Libyan Government of National Accord in January 2019, might have some bearing on the situation.”

The United Nations listed the LIFG on its sanctions list in 2001 because of its association with Osama bin Laden, the Taliban and suspected links to bombings in Morocco in 2003 that killed more than 40 people and the following year in Spain. The United States removed the group from its own list of banned terrorist groups in 2015.

The father of Salman Abedi, the suicide bomber who killed 22 people at a pop concert in Manchester in 2017, was said to have been a member of the LIFG. Some of its former members settled in the northern city after being driven into exile by the Qaddafi regime.

Brandon Lewis, the security minister, told MPs last month that it was “inappropriate and inaccurate to link the group to the tragic and abhorrent attack in Manchester”.

He said: “From our point of view, de-proscription is purely about the fact that the group is defunct.”