Javed Hashmi, from the Pakistan Muslim League of former prime minister Nawaz Sharif, had been sentenced to 23 years imprisonment for distributing a letter which he said was from army officers against President Pervez Musharraf.

Jubilant supporters chanted "Go Musharraf, Go!" and shook their fists outside the court after the ruling, the latest in a series of setbacks for the embattled military ruler with elections looming.

"A three-judge bench accepted the bail application of Javed Hashmi," party spokesman Siddiqul Farooq told AFP. "The court has passed an order for his release on bail."

Court officials quoted by state media said the bench was headed by Chief Justice Iftikhar Muhammad Chaudhry -- who himself won a landmark case last month overturning his suspension in March by Musharraf.

Hashmi, 58, had been ordered to submit a bail bond of 50,000 rupees (830 dollars), a court spokesman said. Hashmi's appeal against his conviction is still pending, the spokesman added.

Coming so soon after the politically sensitive reinstatement of Chaudhry by the Supreme Court on July 20, the ruling reinforces what analysts say is the growing independence of Pakistan's once-compliant judiciary.

General Musharraf faces a growing number of legal challenges to his authority including an appeal lodged by Sharif on Thursday for an end to his seven-year exile from Pakistan.

Musharraf overthrew Sharif in a coup in 1999. Sharif was sentenced to life in prison on tax evasion and treason charges but was allowed to go into exile in Saudi Arabia the following year.

"We got justice because the judiciary got independence after the chief justice events," Farooq said.

Pakistani opposition parties were outraged when Hashmi was arrested in October 2003 on charges of defaming the government and the army, incitement to mutiny and document forgery.

Hashmi, a senior vice president of the Muslim League and its effective leader in Sharif's absence, was sentenced in April 2004.

A senior member of Sharif's party, Raja Zafar ul-Haq said the release of Hashmi, whom he said was held on "baseless" charges, would "encourage political forces ahead of elections."

General elections are due in Pakistan by early next year. Musharraf is also expected to seek reelection as president-in-uniform by parliament, defying the constitution, which says he should quit his military role by the end of 2007.

Musharraf, beset by growing Islamist violence as well as political opposition, held hushed-up talks in Abu Dhabi last week with another former premier, Benazir Bhutto, on a possible power-sharing deal.

"The order has sent a wave of happiness not only among the party workers but there is joy in other oppostion parties also," Haq said. "There is no doubt that the judiciary played the role we expect from it now."