An Algerian living in Britain who was wrongly accused of being involved in the 9/11 terror attacks tells for the first time today of how his life has been 'ruined' by the police and the Crown Prosecution Service.

Lotfi Raissi, 33, a pilot who had trained in the United States before moving to England, was the first person in the world to be arrested in connection with the atrocities. He was suspected of teaching several of the 9/11 terrorists to fly planes.

Raissi was arrested by British police at his home in west London 10 days after the attacks on the World Trade Centre, following intelligence passed on by the US authorities. He was held for almost five months in Belmarsh high-security prison before being released without charge and subsequently exonerated.

Last week the Court of Appeal ruled that the High Court had been wrong to block him from suing the government for compensation, paving the way for a ground-breaking claim for damages.

'I feared for my life in court and inside prison,' Raissi said. 'They moved me from the high-security unit after three or four days and sent me to the normal wing, where I wasn't safe. I suffered racism and discrimination. I got stabbed twice by other prisoners and no one investigated.'

Raissi says he has had two nervous breakdowns as a result of his incarceration and still suffers from high blood pressure and post-traumatic stress disorder. Despite having been completely exonerated, he is still banned from flying anywhere but Algeria because his US extradition warrant is still outstanding. 'I'm not working, I'm blacklisted from all airline jobs,' he said. 'I'm framed as a terrorist.'

His wife and his brother's sister - who both worked in the airline industry - also lost their jobs, he says, as a result of his arrest. His arrest and subsequent attempts to clear his name have also damaged his relationship with his wife, Raissi said. 'Even with my marriage I struggle very much,' Raissi said. 'Every part of my life I struggled with. It is an agony.'

Raissi was forced to drop a $10m claim against the FBI and the US Department of Justice, but he has pledged to continue with his legal action against the British government. 'It's a matter of principle,' Raissi said. 'I want my life back; I want to clear my name and that of my family and to have a normal life.'

The Home Secretary, Jacqui Smith, has 14 days to decide whether she will fight Raissi's compensation case.

While Raissi said he 'cherished' living in Britain, the strain of the last six years to clear his name have left their mark. 'I learned to forgive, I learned patience,' he said. 'But it has been damaging to my life and my dignity - that is something I will never forgive.'