An anti-terrorism court in Pakistan has dropped all terrorism-related charges against the British citizen who, U.S. authorities say, is the mastermind behind the U.K. terror plot to bomb a series of airplanes this summer.

Rashid Rauf still faces charges of fraud and possession of a fake passport, both of which will be pursued in a normal court. Rauf will remain in custody for the time being, and the government of Pakistan does have the right to appeal today's ruling.

Rauf's lawyer told the Agence France-Presse today that the prosecution had claimed Rauf was in possession of 29 bottles of the chemical hydrogen peroxide, which was meant to be used to blow up the passenger jets.

"But they failed to produce any evidence to support the allegations," the lawyer, Hasmat Habib, said. "This chemical is also used to heal wounds."

At the time of his arrest in Pakistan this summer, U.S. authorities described Rauf as the ringleader who was essentially running the plot by remote control from Pakistan. Authorities say they were able to track his phone calls back to London and wire transfers of money for the suicide bombers' plane tickets.

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Pakistani authorities arrested Rauf in cooperation with British authorities. They said he was found near the border with Afghanistan and had direct ties to al Qaeda.