Tom Allard, Jakarta – The US will not release the Jemaah Islamiah operations chief Hambali into Indonesian custody despite finally permitting its counter-terrorism officials to interview the alleged mastermind behind the Bali bombings.

Blocking the extradition of Hambali, al-Qaeda's pointman in South-East Asia who is believed responsible for a string of terrorist attacks in the region, has angered Indonesian police eager to prosecute him here. The US has rebuffed such requests for more than five years.

However, at a political level, the Indonesian Government is quietly content with the decision, believing his return could inflame Islamists and pose a security threat in the fraught environment of an election year.

Hambali, whose real name is Riduan Isamuddin, was interviewed by two members of Indonesia's anti-terrorism squad, Detachment 88, in recent weeks at Guantanamo Bay. The Bush administration had consistently denied Indonesia's requests for access.

President Barack Obama reversed that stance and announced that, within a year, he wants to close the controversial US military prison at Guantanamo Bay. The fate of Hambali and more than 240 other "enemy combatants" detained there is in the balance.

Senior Indonesian sources said the US had made it clear it would not release Hambali after Guantanamo Bay closes.

Counter-terrorism police said the US is concerned about releasing the intelligence gleaned from interrogations of Hambali to other nations and the prospect it will be challenged as being extracted by torture.

Hambali, one of 14 "high-value" detainees at the military prison, probably will be transferred to a prison on the US mainland but what awaits him there is problematic. The US has still not worked out how it will bring him and other senior al-Qaeda figures to justice.

Hambali has some links to the ringleaders of the September 11 attacks. However, the deaths of seven Americans in the Bali bombings mean the 2002 atrocity probably gives US authorities the best option to to charge him in a US court.

Hambali also allegedly was involved in the spate of bombings of churches in Indonesia in 2000 and in financing the Marriott Hotel bombing attack in Jakarta in 2003.

In Jakarta, the terrorism analyst Sidney Jones, of the International Crisis Group, said Hambali's return to Indonesia would be highly problematic for the Government. "He would be a celebrity. He would be a pop star," she said. "He would become a rallying point for [militant Islamic] groups."

There are also doubts about whether Indonesian courts could convict him. The terrorism laws were created after the 2002 Bali bombings and it is doubtful that much forensic material or authoritative testimony could be assembled.