An Ethiopian student who lived in London claims that he was brutally tortured with the involvement of British and US intelligence agencies.

Binyam Mohammed, 27, says he spent nearly three years in the CIA's network of 'black sites'. In Morocco he claims he underwent the strappado torture of being hung for hours from his wrists, and scalpel cuts to his chest and penis and that a CIA officer was a regular interrogator.

After his capture in Pakistan, Mohammed says British officials warned him that he would be sent to a country where torture was used. Moroccans also asked him detailed questions about his seven years in London, which his lawyers believe came from British sources.

Western agencies believed that he was part of a plot to buy uranium in Asia, bring it to the US and build a 'dirty bomb' in league with Jose Padilla, a US citizen. Mohammed signed a confession but told his lawyer, Clive Stafford Smith, he had never met Padilla, or anyone in al-Qaeda. Padilla spent almost four years in American custody, accused of the plot. Last month, after allegations of the torture used against Mohammed emerged, the claims against Padilla were dropped. He now faces a civil charge of supporting al-Qaeda financially.

A senior US intelligence official told The Observer that the CIA is now in 'deep crisis' following last week's international political storm over the agency's practice of 'extraordinary rendition' - transporting suspects to countries where they face torture. 'The smarter people in the Directorate of Operations [the CIA's clandestine operational arm] know that one day, if they do this stuff, they are going to face indictment,' he said. 'They are simply refusing to participate in these operations, and if they don't have big mortgage or tuition fees to pay they're thinking about trying to resign altogether.'

Already 22 CIA officers have been charged in absentia in Italy for alleged roles in the rendition of a radical cleric, Hassan Mustafa Osama Nasr, seized - without the knowledge of the Italian government - on a Milan street in February 2003.

The intense pressure on US Secretary of State Condoleezza Rice last week, coupled with Friday's condemnation of the use of evidence extracted under torture by the House of Lords, has intensified concerns within the CIA. The official said: 'Renditions and torture aren't just wrong, they also expose CIA personnel and diplomats abroad to enormous future risk.'

Mohammed arrived in Britain in 1994. He lived in Wornington Road, North Kensington, and studied at Paddington Green College. For most of this time, said his brother, he rarely went to a mosque. However, in early 2001 he became more religious.

The Observer has obtained fresh details of his case which was first publicised last summer. He went to Pakistan in June 2001 because, he says, he had a drug problem and wanted to kick the habit. He was arrested on 10 April at the airport on his way back to England because of an alleged passport irregularity. Initially interrogated by Pakistani and British officials, he told Stafford Smith: 'The British checked out my story and said they knew I was a nobody. They said they would tell the Americans.'

He was questioned by the FBI and began to hear accusations of terror involvement. He says he also met two MI6 officers. One told him he would be tortured in an Arab country.

The interrogations intensified and he says he was taken to Islamabad; then, in July 2002, on a CIA flight to Morocco. His description of the process matches independent reports. Masked officers wore black. They stripped him, subjected him to a full body search and shackled him to his seat wearing a nappy.

In Morocco he was told he had plotted with Padilla and had dinner in Pakistan with Khalid Sheik Mohammed, the planner of 9/11, and other al-Qaeda chiefs. 'I've never met anyone like these people,' Mohammed told Stafford Smith. 'How could I? I speak no Arabic... I never heard Padilla's name until they told me.'

During almost 18 months of regular beatings in Morocco, Mohammed says he frequently met a blonde woman in her thirties who told him she was Canadian. The US intelligence officer told The Observer this was an 'amateurish' CIA cover. 'The only Americans who historically pretended to be Canadian were backpackers travelling in Europe during the Vietnam war. Apart from the moral issues, what disturbs me is that, as an attempt to create plausible deniability, this is so damn transparent.'

According to Mohammed, he was threatened with electrocution and rape. On one occasion, he was handcuffed when three men entered his cell wearing black masks. 'That day I ceased really knowing I was alive. One stood on each of my shoulders and a third punched me in the stomach. It seemed to go on for hours. I was meant to stand, but I was in so much pain I'd fall to my knees. They'd pull me back up and hit me again. They'd kick me in the thighs as I got up. I could see the hands that were hitting me... like the hands of someone who'd worked as a mechanic or chopped with an axe.'

Later he was confronted with details of his London life - such as the name of his kickboxing teacher - and met a Moroccan calling himself Marwan, who ordered him to be hung by his wrists. 'They hit me in the chest, the stomach, and they knocked my feet from under me. I have a shoulder pain to this day from the wrenching as my arms were almost pulled out of their sockets.'

Another time, he told Stafford Smith: 'They took a scalpel to my right chest. It was only a small cut. Then they cut my left chest. One of them took my penis in his hand and began to make cuts. He did it once, and they stood still for maybe a minute watching. I was in agony, crying, trying desperately to suppress myself, but I was screaming... They must have done this 20 to 30 times in maybe two hours. There was blood all over.'

In September he was taken to Guantanamo Bay where he has been charged with involvement in al-Qaeda plots and faces trial there by military commission. Stafford Smith said: 'I am unaware of any evidence against him other than that extracted under torture.'

The Foreign Office, the Moroccan Embassy and the CIA refused to comment yesterday.