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The release of Jose Ignacio de Juana Chaos has sparked outrage in Spain.
Prime Minister Jose Luis Rodriguez Zapatero spoke of his "contempt" for the former Eta militant, but said his government had to respect the law.
Juana Chaos was sentenced to more than 3,000 years in 1987, but under the penal code then in force, the maximum term he could serve was 30 years.
He qualified for early release in 2004 but was given a further term for threatening behaviour.
Juana Chaos took part in a string of Eta attacks, including one of the group's deadliest - a Madrid car-bombing in 1986 which killed 12 members of the Guardia Civil police force.
In recent years he carried out several hunger strikes to protest against his treatment by the authorities.
Mr Zapatero said Juana Chaos "generates a perfectly understandable feeling of contempt" among all citizens "and of course the head of the government".
"But we must respect the law," the prime minister added.
The group has killed more than 800 people in its four-decade campaign to set up an independent state straddling northern Spain and south-western France.
The release of Juana Chaos came 40 years to the day after Eta carried out its first targeted killing.
(BBC)
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