Latest indications are that he might be deported to India in order that the Australian government could save itself of further embarrassment.
A prominent liberal newspaper lashed out angrily, the anti-terror case against Haneef is imploding.
As each day passes the police case against Dr Haneef looks increasingly thin. The latest setback for the Australian Federal Police (AFP) came in the form of a revelation that Haneef was not a focus of the UK inquiry at all.
Legal sources in both Britain and Australia have told The Age that Haneef has not been "a significant focus" of the British investigation into the foiled terrorist plots. It is believed that Haneef's name has hardly been mentioned to Sabeel Ahmed, who has been charged with concealing information that could have prevented an act of terrorism.
Earlier there was the admission that the crucial SIM card was not recovered from the wreckage of the burning jeep, but from Sabeel's residence full eight hours later.
The media frenzy is forcing the police to react to every fresh storyline, no matter how fanciful.
AFP boss Mick Keelty was forced to deny significant media reports about the case twice in as many days.
He said there was no evidence connecting Dr Haneef to any plot to blow up buildings on the Gold Coast and yesterday poured cold water on reports police had written names in the suspect's diary.
Queensland Premier Peter Beattie has accused Federal Police of generating a national cynicism that will undermine the anti-terror laws.
Haneef is currently languishing in a solitary cell in Brisbane, Queensland, awaiting a Fdederal Court hearing on his appeal against the cancellation of his work visa and a committal hearing on terrorism-related charges. Both hearings are scheduled for August.
An editorial writer agonized, "But at the end of the day, we may never know Dr Haneef's guilt or innocence.
He may leave our shores without having been given the benefit of a comprehensive and fair trial.
His legacy will be a set of anti-terror laws in disarray, a police force chastened by one of its first tests under those laws and a number of opportunistic politicians with egg dripping from their faces."
It has also been pointed out that an unexpected twist is the possible damage the episode will do to Australia's efforts to recruit foreign doctors.
Many rural communities would not have a local GP if foreign-trained doctors were not prepared to live in remote areas.