Former Guantanamo Bay detainee Moazzam Begg outside high security Belmarsh Prison in south London
Former Guantanamo Bay prisoner Moazzam Begg is set to sue the Government for more than £100,000 after the collapse of a £1.25 million terror case against him.
The revelation comes amid claims that he was in contact with British security services at MI5 before and after his trips to Syria in 2012.
An emotional Begg was cleared at the Old Bailey last week as a judge was told "new evidence" had come to light casting doubt on his alleged terrorist activities while visiting Syria.
They included allegations of attending a Syrian terror camp, funding terrorism by supplying jihadists with a Honda generator and possessing documents connected to terrorism.
But after footing a previous estimated £1 million pay-out over his detention in the US military prison at Guantanamo Bay, British taxpayers face paying out again.
It is understood Begg's supporters which include the pressure group CAGE UK are urging him to sue for wrongful arrest, false imprisonment and malicious prosecution.
Legal experts suggested he could be awarded more than £100,000, especially if the Government is unable to disclose the "new evidence" for national security reasons.
Errol Robinson, of Mcgrath and Co solicitors, said: "The government will no doubt be reluctant to go to an open court and disclose any evidence which may compromise their investigatory methods.
"That suggests there will be an out-of-court settlement in which Begg's solicitors would easily ask for and expect to receive upward of £100,000, especially as it was such a high-profile arrest and imprisonment."
Birmingham-born Begg, 45, spent two years in the notorious US military prison in Cuba, before he was released in 2005.
He was among a group of ex-Guantanamo detainees who sued the British government accusing officials of complicity in their detention.
Three years ago the case was settled out of court and he is believed to have received a pay-out of up to £1 million.
The inquiry involved covert surveillance and is estimated to have cost around £1.25 million.
Christopher Hehir, prosecuting, said: "When Mr Begg was charged with a number of offences earlier this year the Crown Prosecution Service were satisfied there was sufficient evidence to afford prosecution.
"In the months that have followed, the prosecution have kept under review the sufficiency of the evidence in this case.
"The prosecution have recently become aware of relevant material and in light of which, after careful and anxious consideration, have reached the conclusion that there is no longer a realistic prospect of conviction in this case. The prosecution therefore offer no evidence."
Begg first hit the international headlines when he was arrested in Islamabad, Pakistan, in February 2002 as an "enemy combatant".
He was held prisoner at Bagram, Afghanistan, before being transferred to Guantanamo Bay.
In January 2005, he was freed on the orders of then President George W Bush.
At an earlier hearing, his counsel Ben Emmerson, QC, said: "Mr Begg did not train anyone for the purposes of terrorism as defined in the 2001 [Terrorism] Act.
"Mr Begg says he was involved in training young men to defend civilians against war crimes by the Assad regime."
Begg, who moved to Afghanistan in 2001 before moving to Pakistan, was also suffering from post-traumatic stress disorder, said Mr Emmerson.
After Wednesday's brief hearing, West Midlands Police assistant chief constable Marcus Beale said: "Terrorism investigations are often long
and complex. This case was no exception.
"From the beginning, this case has challenged the relationship between West Midlands Police and some of the communities we serve.
"I would like to reassure them, and Mr Begg, that at every stage of this investigation my officers acted in the best interests of the public and of justice.
"This case has been investigated in a diligent and professional manner. The events demonstrate that the police and CPS continually assess the evidence in terrorism prosecutions and will alter course if that is the right and proper thing to do."
Gareth Peirce, Begg's solicitor, said: "Moazzam Begg is a good and brave man.
"He is a rare individual who will talk to everyone and listen to everyone, even those with whom he profoundly disagrees.
"There is nothing new that can have been discovered now that was not always crystal clear - that this is an innocent man."