A university has been plunged into a row over academic freedom after suspending a lecturer who criticised its treatment of a student who researched al-Qaida.

Rod Thornton, an expert in counter-insurgency at Nottingham University, was suspended on Wednesday after he accused the university of passing "erroneous evidence" to police and attempting to discredit a student who downloaded an al-Qaida training manual from a US government website.

A member of staff at the university also lobbied successfully for Thornton's article to be taken down from an academic website, arguing that it contained defamatory allegations.

The masters student, Rizwaan Sabir, was arrested and detained for six days for downloading the al-Qaida material.

A university administrator was also arrested after Sabir asked him to print the document because the student could not afford the printing fees. Both were later released without charge.

In the paper, Thornton wrote: "Untruth piled on untruth until a point was reached where the Home Office itself farcically came to advertise the case as 'a major Islamist plot' ... Many lessons can be learned from what happened at the University of Nottingham.

"This incident is an indication of the way in which, in the United Kingdom of today, young Muslim men can become so easily tarred with the brush of being 'terrorists'."

Thornton's article was prepared for the British International Studies Association (Bisa), which promotes the study of international relations and held its annual conference in Manchester last week.

A leaked email exchange shows that one of Thornton's fellow academics at Nottingham claimed the paper made "clearly defamatory" allegations against individuals.

In an email to colleagues, Professor Theo Farrell, Bisa's vice-chair, writes that the request gets the organisation into the "difficult territory" of ensuring academic freedoms while protecting itself from being sued for libel.

Thornton, a former soldier, told the Guardian he had received a letter from the vice-chancellor telling him he had been suspended because of a "breakdown in working relationships with your colleagues caused by your recent article".

He said: "I'm just saddened by it. I'm criticising my own university but there's a bigger issue in terms of the university's treatment of Rizwaan Sabir. They failed miserably in their duty of care to him."

Sabir, now a PhD student at Strathclyde University, said: "A public inquiry is needed more than ever before into the university's actions."

Referring to the arrests in May 2008, Thornton wrote in his paper that both Sabir and the administrator, Hicham Yezza, were "completely innocent" of any link to terrorism.

"They were simply caught up in an extraordinary set of circumstances that might be described as laughable if the consequences had not been quite so severe.

"And, at the heart of their tribulations, there does seem to be something really rather dark; something I would never have believed existed in a modern British university and indeed, within modern British society."

Thornton writes that the al-Qaida manual which led to the arrests is now stocked in the university's library.

He says the university's administration notified police but had never given any indication they had carried out "even the simplest of internet checks or ... [sought] either advice or guidance from elsewhere".

A university spokesman said Thornton's article was "highly defamatory" of a number of his colleagues.

"The university rejects utterly the baseless accusations he makes about members of staff. We understand that Bisa has decided to remove the article from its website.

"Academic freedom is a cornerstone of this university and is guaranteed in employment terms under the university's statutes.

"That freedom is the freedom to question, to criticise, to put forward unpopular ideas and views – it is not the freedom to defame your co-workers and attempt to destroy their reputations as honest, fair and reasonable individuals.

"It is important to remember that the original incident, almost three years ago, was triggered by the discovery of an al-Qaida training manual on the computer of an individual who was neither an academic member of staff, nor a student, and in a school where one would not expect to find such material being used for research purposes.

"The university became concerned and decided, after a risk assessment, that those concerns should be conveyed to the police as the appropriate body to investigate."