An agreement was reached between Musharraf and the US authorities shortly after the terrorist mastermind fled from Tora Bora caves in eastern Afghanistan with the Taliban regime collapsing, The Guardian said quoting Monsoor Ijaz, a Pak-American financier who has spent years tracking Laden's movements and operations.

The Pakistanis feared that to capture or kill Laden soon after a hugely unpopular war would incite civil unrest in Pakistan and trigger a spate of revenge al-Qaeda attacks on western targets across the world, the expert said.

The Americans, Ijaz said, accepted the argument and the following months centred on taking down not Laden but the "retaliation infrastructure" of al-Qaeda.

It meant that Musharraf frequently put out remarkably conflicting accounts of the status of Laden while the US administration barely mentioned his name, the paper said.

Ijaz, who recently visited Pakistan, believes Laden is hiding in "northern tribal areas" of the country protected by three elaborate security cordons, the first being a ring around 120 miles in diameter of tribesmen, whose job is to report any approach by Pakistani troops or US special forces.

Inside them is a lighter ring, made up of village elders who would warn if the outer ring is breached. At the centre is Laden himself protected by some close relatives or bodyguards.