Indian doctor Mohammad Haneef, who was detained in Australia [Images] in connection with the failed London bombings, was today cleared by a special inquiry which said he was 'wrongly charged' in the case, prompting the government to admit that lapses occurred in the handling of the episode.

However, government will not initiate any action against any Australian official who handled the case and would leave it to the agencies to decide whether any disciplinary action was needed.

A report by retired Supreme Court judge John Clarke, released today found that Haneef was wrongly charged and detained on the Gold Coast last year over suspected links to terrorist acts in Britain, media reports said here.

Clarke said he found "no evidence that he (Haneef) was associated with or had foreknowledge of the terrorist events" in London [Images] and Glasgow in June 2007.

Federal Attorney-General Robert McClelland said mistakes were made from officer level to the highest level. However, he added that he had full confidence in all agency heads.

 "At the end of the day political leaders and agency heads must accept responsibility for errors that occurred on their watch," he said.

McClelland also said the government had accepted the recommendations of Clarke, including the one for an independent review of the national anti-terrorism laws.

"We weren't on a witchhunt", McClelland said, adding that no one at any level in any agency would necessarily face any punishment. The Labor Government would leave it to the agencies to decide whether any disciplinary action should be taken against a long list of people whose actions were grossly incompetent, he said.