By Asif Shahzad and Mubasher Bukhari
ISLAMABAD (Reuters) - Pakistan has removed the leader of one of the country's largest Islamist extremist groups from its terrorist watchlist while the Election Commission considers whether his group can field candidates in a general election next month, an official said on Thursday.
Muhammad Ahmed Ludhianvi is head of Ahl-e-Sunnat Wal Jamaat (ASWJ), a radical Sunni group that has incited violence against Pakistan's minority Shi'ite Muslims.
ASWJ shares roots with the more violent Lashkar-e-Jhangvi militant group based in central Punjab province, which had strong ties to al Qaeda and has waged a deadly campaign against Shi'ites for more than two decades.
Who authorised the removal of Ludhianvi from the terrorist list is unclear, as a caretaker government is running Pakistan during the two months of campaigning ahead of the July 25 general election.
The ASWJ has registered dozens of candidates to stand in poll, using another name for their party, but their candidacy has been challenged because of the group's inclusion on the terrorist watchlist.
Hasan Askari Rizvi, the caretaker chief minister of Punjab province, confirmed the removal of the ban on Ludhianvi and said his assets would be unfrozen and he would be free to travel.
"Punjab Government is implementing decisions of Election Commission and the federal government in this regard," Rizvi told Reuters.
"The election commission will decide today in a meeting whether his group can contest the election."
The election pits the former ruling party of ousted Prime Minister Nawaz Sharif - who was disqualified from office last year by the Supreme Court - against opposition figure Imran Khan's party as well as the Pakistan People's Party led by Bilawal Bhutto Zardar, the son of assassinated leader Benazir Bhutto.
Islamist parties have seldom had a major impact at elections, though they have created a high profile and possess a solid vote bank and have at times, according to analysts, enjoyed covert support from Pakistan's intelligence agencies.
Ludhianvi has made forays into politics before. The Sunni cleric is best known for fomenting hatred against the country's minority Shi'ites, but he has recently shown signs of seeking to rehabilitate his group's image.
Earlier this year, he was one of more than 1,800 Pakistani Muslim clerics who signed an Islamic directive, or fatwa, forbidding suicide bombings, in a book unveiled by the government.
He was a leader of Sipah-e-Sahaba (SSP), a sectarian Sunni group which emerged in the southern Punjab area of Jhang in the mid-1980s with the support of Pakistani intelligence and which was later linked to hundreds of killings of Shi’ites.
A splinter group of SSP, Lashkar-e-Jhangvi (LeJ), evolved into one of Pakistan’s most feared militant groups and has claimed responsibility for many attacks on Shi’ites, including a series of bombings that killed almost 200 people in the southwestern city of Quetta in 2013.
(Reporting by Asif Shahzad; Editing by Simon Cameron-Moore)