Two former Guantanamo Bay detainees are celebrating after Spanish authorities dropped a bid to extradite them to face terrorism charges.

British residents Jamil el-Banna and Omar Deghayes face no further legal challenges after claims they are linked to al Qaida were dropped.

The pair returned to Britain in December after being released from the controversial United States camp in Cuba.

They were immediately held under European Arrest warrants alleging that they were members of a terrorist cell operating in Spain.

The Spanish authorities dropped proceedings during a hastily-convened hearing at City of Westminster Magistrates' Court.

Melanie Cumberland, for the Spanish authorities, said the decision was made following medical reports.

Speaking from his home in Brighton, Mr Deghayes said: "It's good - it's happy news.

"I always knew they would realise their mistake and give up the case."

The pair, held by the United States since 2002, were released from the notorious detention centre after a request by the British Government last year.

Pakistani Mr el-Banna, 45, a father-of-five from Dollis Hill, north west London, is a British resident having successfully applied for asylum.

Mr Deghayes, 38, who lives in Saltdean, near Brighton, is a Libyan who came to the UK as a refugee and was granted residency.

Clive Stafford Smith, founder of campaigning group Reprieve, who represented both men, said: "The decision is based on the fact that these guys have suffered enough.

"They have been psychologically scarred from what happened to them in Guantanamo and before.

"They are extremely glad and grateful."