Rangzieb Ahmed was arrested Aug. 25, 2006, in North West Frontier Province, and claims he was tortured and mistreated in custody, Human Rights Watch said.
Officials did not charge him, and a review board headed by Supreme Court Justice Faqir Muhammad Khokhar ordered his release last Friday, the New York-based group said.
"The fact is that during one year of detention, the Pakistanis, the British and the U.S. have been unable to unearth a shred of evidence against this person," said Ali Dayan Hasan, South Asia researcher for Human Rights Watch.
Ahmed, 30, said he was interrogated several times by U.S. law enforcement personnel from unidentified agencies and by British security services, but he denied wrongdoing and involvement with al-Qaida, Human Rights Watch said.
Officials at the British Embassy in Islamabad and Pakistan's Interior Ministry were not available Friday for comment.
Tayab Ali, a lawyer with the London-based criminal defense firm McCormacks, said it planned to meet Ahmed at London's Heathrow Airport on Friday afternoon to make sure "that he's not mistreated on his return to the United Kingdom."
"We anticipate that he may be arrested on his arrival," Ali said. "My initial understanding is that he was mistreated (in Pakistan)."
Ali said he did not know why Ahmed had been detained. Pakistan held Ahmed under its security powers and was not obliged to specify on what charges he was held, Ali said.
Ahmed, who was born in the northern England city of Manchester, traveled to Pakistan last year to visit relatives, his brother Mohammed Pervaiz said.
Pervaiz said Ahmed was tortured in Pakistani custody and was told by a prosecutor in court that the government had "secret evidence" against him. British officials were not allowed to see Ahmed because Pakistan claimed he held joint Pakistani citizenship, he said.
Human Rights Watch said Ahmed had been involved with Kashmiri militant groups and jailed in India. British authorities secured his release, and Ahmed returned to Britain before traveling to Pakistan last year.
Britain and Pakistan are deepening their law enforcement cooperation, including counterterrorism efforts against Islamic extremists in Britain's Pakistani community.
Another British citizen of Pakistani origin, Rashid Rauf, was detained in August 2006 on suspicion of masterminding a plot to blow up trans-Atlantic jetliners.
A court dropped terrorism charges against Rauf in December, but he is still being held for possessing a chemical used in explosives and for lacking valid travel documents.