Hafiz Saeed, suspected of masterminding the Mumbai attacks in 2008 that killed 166 people, including six Americans, met government officials from the Punjab province and pledged his support for the drive, the official said.
"Saeed has agreed with the Punjab government programme of de-radicalisation and rehabilitation of former militants and extended full cooperation," the counter-terrorism official told Reuters.
The counter-terrorism official maintained that Saeed had not been paid for his de-radicalisation efforts.
US officials in Washington said that the decision to offer a reward under the State Department's longstanding "Rewards for Justice" program came after months of discussions among US agencies involved in counter-terrorism.
The $10 million figure signifies major US interest in Saeed. Only three other militants, including Taliban leader Mullah Omar, fetch that high a bounty. There is a $25 million bounty on the head of al Qaeda leader Ayman alZawahiri.
The announcement of a reward for Saeed comes at a time of strained ties between the United States and Pakistan and is likely to increase pressure on Islamabad to take action against one of Pakistan's most notorious religious leaders.
A senior police official in Punjab province, who is closely involved with investigations into militant activity, confirmed that Saeed and his supporters were helping efforts to transform militants into law-abiding citizens.
"Jamaatud Dawa (JuD) was consulted, and they approved the de-radicalisation plan. They assured us of their intellectual input and resource materials. They also offered teachers," he told Reuters, referring to the charity Saeed heads.
The bounty highlighted the divide between the United States' direct approach to tackling militancy, and strategies employed by Pakistan.
While Pakistan has mounted offensives against militant groups like the homegrown Taliban, it also contends other tactics such as de-radicalisation are vital to sustaining battlefield gains.
Yahya Mujahid, the JuD spokesman, said the group had not participated in the de-radicalisaton programme.
Hafiz Khalid Waleed, another senior JuD member, declined to comment on whether their leader had been directly assisting the government in de-radicalisation.
But he said Saeed and his followers were promoting non-violence.
"Hafiz Saeed was one of the first religious leaders to denounce militancy and suicide bombings," said Waleed. "Our schools and madrassas are urging peace."
Spotting idle militants
Under the programme, former militants are urged to develop technical skills that could give them long-lasting employment to keep them from taking up arms against the state again.
Experts also try to reverse what is called brainwashing by militants who preach war against the West.
To help the de-radicalisation programme, Saeed identifies former militants who may still be recruited because they are jobless and idle and he helps steer them toward the programme, said the counter-terrorism official.
India maintains Saeed is a criminal and has long called for his capture, blaming the Lashkar-e-Taiba (LeT), the group he founded in the 1990s, for the Mumbai carnage.
Pakistan is home to some of the world's most dangerous militant groups, who carry out suicide bombings and beheadings in their bid to topple the US-backed government. There are also less violent groups with the same aims.
But many Pakistani citizens privately support Saeed's animosity to India.
The bounty, which would be paid for information leading to Saeed's arrest and conviction, however puzzled Pakistanis. His whereabouts are usually not a mystery. He wanders the country freely, fires up supporters at rallies and runs a huge charity.
Waleed mocked the decision to place a bounty on Saeed.
"President Barack Obama's election symbol was a donkey and his government is acting like one. They have no evidence against Hafiz Saeed and are scrambling to make up stories," he told Reuters.
Pakistani officials say Saeed, who Western officials suspect of links to al Qaeda, has the right to move freely because he has been cleared by Pakistani courts of a range of accusations.
Saeed abandoned the leadership of the LeT after India accused it of being behind an attack on the Indian parliament in December 2001. But his charity is suspected of being a front for the LeT.
He denies any wrongdoing and links to militants.
Over 1,000 of Saeed's supporters protested against the bounty on Friday.
Saeed agreed to support de-radicalisation because he felt that former militants should find jobs and re-join mainstream society, said the counter-terrorism official, who has been at the forefront of efforts to fight militancy in Punjab.
The counter-terrorism official, who engineered the project, said 200 former militants had participated this year in Punjab, including some from Saeed's group.
Another 100 will be completing the programme by June.
Saeed, a former professor of Islamic studies at an engineering university, appeared at a press conference on Wednesday in Rawalpindi and taunted the United States.
Saeed lives near a park and a mosque in a non-descript villa with a policeman stationed outside in Lahore.
Some of his bodyguards wear olive camouflage vests while others are dressed in dark traditional shalwar-kameez, baggy shirt and trousers. Clutching AK-47 assault rifles, a few are positioned on his rooftop watching the street.
Saeed enjoys armed protection from the state because of his "new thinking", sources said.
"Al Qaeda or factions from the Pakistani Taliban may want to kill him," said one of the sources, adding India may want to target him as well.
Asked if the reward would anger Saeed's followers and undermine de-radicalisation efforts, he said: "There is resentment but I hope the programme won't be affected."
COMMENTS (19)
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In the standard that PAK has established one has to ask where is the proof? Just because some unnamed official says it is so is not proof. So where is the proof?
If I was a PAK I would demand proof of this other than the word of some nameless so called expert...
@Bhindian: No. They aren't. It's that simple. Feel free to attempt some context gymnastics. Just don't hurt yourself.
I think it is good that Pakistan is demanding proof from USA. I think Saeed should be protected because if he is trying to bring stability obviously radical elements in Pakistan would want him assassinated. USA would just want to get information from him via torture etc and use him as a scapegoat.
It is interesting that this so called expert is not identified. One can safely assume he is a PAK. Why would anyone sane person believe anything coming a PAK official.
Given the terrorist situation in PAK, he must not be much of an expert.
Pakistan establishment is scared to the daylight of the bounty of 95 CRORES Pakistan rupees for providing information leading to his arrest and prosecution.
This is because it was the Pakistani establishment that was using/misusing Hafiz to train terrorists for operations such as Mumbai massacre of November 2008 and they have real fear that any one of ISI handlers could secretly contact USA with solid evidence of Hafiz's involvement in scores of terrorist activities.
Imagine 95 crore rupees and a green card for the family to migrate to the land of opportunities known as US of A.
@Pollack, you are 100% right. Mr Hafeez is government sponsored and an agent of the deep state.
Pakistanis are funny people!
US wants to offer a reward for info leading to Hafiz's arrest. It is not a bounty on his head. Can our supposedly educated leaders not read English or what?
@Zaid Hamid, both are different so you can believe both.
"hafiz saeed is helping to deradicalize militants"
Read between the lines, it means "hafiz saeed is helping to stop militants from attacking Pakistan and Pakistan security forces"
Deradicalization means more than just stopping militants from attacking one government. In the real world, deradicaized militants won't attack ANYBODY..
This sort of deceit won't work anymore. People are smarter now.
Yes I believe it! Just like OBL was not hiding at abbottabad mansion with his many wives, he was actually running a woman's shelter in abbottabad.:)
I read two headlines on the same page:
Hafiz Saeed helping de-radicalise militants, says counter-terrorism official
Hafiz Saeed calls for jihad against America
Which one should I believe?
@Truth hurts: "Come on, why were these same jihadis called by USA “Heroes” during Soviet war in Afg? By the way stop siding the Indians as there are much more Indians who hate Pakistan and funding TTP, BLA terrorists than Pakistanis!!"
read the bold word in ur comment and please enlighten me of any present war situation in which these people are having a contribution
@Dr Kadar Khan FRCS: Come on, why were these same jihadis called by USA "Heroes" during Soviet war in Afg? By the way stop siding the Indians as there are much more Indians who hate Pakistan and funding TTP, BLA terrorists than Pakistanis!!
Details of de-radicalisation must come forwrad, but all these good projects lose grounds when saeed supporters hail jihad against west and america after friday prayers.
once a jihadi,always a jihadi