KARACHI:Pakistan's Supreme Court on Thursday ordered the release of an Islamist convicted of beheading U.S. journalist Daniel Pearl, a decision that has left his family in "complete shock", lawyers said.

U.S. Secretary of State Antony Blinken called the decision "an affront to terrorism victims everywhere, including in Pakistan" and said Washington was prepared to prosecute Ahmed Omar Saeed Sheikh in the United States.

Sheikh, who was the main suspect in the 2002 kidnapping and murder of Pearl, a Wall Street Journal reporter, was acquitted by a panel of three judges.

"By a majority of 2-1, they have acquitted all the accused persons and ordered their release," a provincial advocate general, Salman Talibuddin, told Reuters.

Pearl, 38, was investigating Islamist militants in Karachi after the Sept. 11, 2001, attacks on the United States when he was kidnapped.

His case garnered headlines globally after a video of his beheading emerged weeks after he was abducted.

Sheikh and his co-accused are to be released immediately if they are not required in any other case, the head of the court panel, Justice Mushir Alam, said in a short court order.

A high court last year commuted the death penalty of the British-born Sheikh to a life sentence and acquitted his three co-accused, citing lack of evidence.

The government and Pearl's parents challenged that decision and pleaded to the Supreme Court to reinstate the death penalty.

The Supreme Court turned down both pleas on Thursday.

The Pearl family was in "complete shock", the family's lawyer, Faisal Siddiqi, told Reuters, adding that the court decision was a travesty of justice.

"No amount of injustice will defeat our resolve to fight for justice for Daniel Pearl," he said.

In his statement, Blinken said the United States was "deeply concerned" by the decision to acquit Sheikh and his co-defendants and "any proposed action to release them."

He noted that Pakistani Attorney General Khalid Javed Khan said he intended to review the decision. Blinken added that the United States was "prepared to prosecute Sheikh in the United States for his horrific crimes."

Sheikh was indicted in 2002 by a federal grand jury in New Jersey on charges of hostage-taking and conspiracy to commit hostage-taking, resulting in Pearl's death.

He also was indicted in 2001 in the United States for the 1994 kidnapping in New Delhi, India, of an American tourist, who was rescued by police.