He was released from Long Lartin prison, in Worcestershire. He has spent most of the last 10 years in custody.
A UK court approved his appeal against deportation after deciding witness evidence obtained by torture might be used at trial in Jordan.
The government believes the wrong legal test was applied and is to appeal.
"We had received a number of assurances from the Jordanian government - they had even changed their constitution," a spokesman for Prime Minister David Cameron said.
"We believe that we have got the right assurances from the Jordanian government."
He added: "The Home Office will be ensuring that we take all the steps necessary to ensure that Qatada does not present a risk to national security."
Jordan's acting information minister Nayef al-Fayez told the BBC his government shared UK authorities' disappointment at the Special Immigration Appeals Commission (Siac) ruling on Monday.
When Abu Qatada arrived back at his home in Wembley, north-west London, around lunchtime on Tuesday, a small group of protesters gathered outside chanted, "Out, out, out."
Earlier this year, judges at the European Court in Strasbourg ruled the cleric - whose real name is Omar Othman - would not face ill-treatment if returned to Jordan, citing assurances outlined in a UK-Jordan agreement.
Crucially, however, the judge did not believe he would get a fair trial because a Jordanian court could use evidence against Abu Qatada that had been obtained from the torture of others.
On Monday, despite the UK obtaining additional assurances from Jordan, Siac chairman Mr Justice Mitting ruled he was not satisfied Abu Qatada would be tried fairly.
'Act fast'
Speaking to ITV's Daybreak, Deputy Prime Minister Nick Clegg said: "He should not be in this country, he is a dangerous person. He wanted to inflict harm on our country and this coalition government is going to do everything we can to challenge this every step of the way to make sure that he is deported to Jordan."
Shadow home secretary Yvette Cooper said people would be "horrified that Abu Qatada is now out on Britain's streets rather than on a plane", and that government efforts to secure his deportation had "clearly failed".
"Home Office ministers should be setting off to Jordan straight away to discuss what additional action would get this sorted out. The Jordanian government have already been very helpful so ministers should act fast," she said.
David Anderson QC, the Independent Reviewer of Terrorism Legislation, told the BBC: "The key to this case really lies in Jordan.
"What the judge said, what the court said in terms, was that a simple amendment to the Jordanian criminal code so as to remove an ambiguity that is in it at the moment ought to suffice to make deportation possible," he told Radio 4's Today programme.
Home affairs committee chairman Keith Vaz said the visit to the UK of the king of Jordan later this month gave the government "an opportunity to try and persuade him to go that little bit further in terms of the way the criminal code of Jordan operates".
The case had cost taxpayers £1m, he said.
Human rights lawyer Julian Knowles said the case would bring "another year's worth of UK litigation at least".
"And then if Abu Qatada is the loser at the end of the domestic phase, he can then go back to the European Court," he said.
Speaking in the Commons after Abu Qatada's release, Justice Secretary Chris Grayling said he was "frustrated" by international court rulings that had led to Monday's decision.
Human rights lawyer Julian Knowles said the case would bring "another year's worth of UK litigation at least".
"And then if Abu Qatada is the loser at the end of the domestic phase, he can then go back to the European Court," he said.
Speaking in the Commons after Abu Qatada's release, Justice Secretary Chris Grayling said he was "frustrated" by international court rulings that had led to Monday's decision.
"I do not believe it was ever the intention of those who created the human rights framework that we are currently subject to, that people who have an avowed intent to damage this country should be able to use human rights laws to prevent their deportation back to their country of origin," he added.
The bail conditions imposed by Mr Justice Mitting on Abu Qatada include being allowed out of his house only between 08:00 and 16:00, having to wear an electronic tag, and being restricted in whom he meets.
Abu Qatada faces a retrial in Jordan for allegedly conspiring to cause explosions on Western and Israeli targets in 1998 and 1999. He was found guilty of terrorism offences in his absence in Jordan in 1999.
The Palestinian-born Jordanian has been described as the spiritual leader of the mujahideen. Security chiefs believe he played a key ideological role in spreading support for suicide bombings.
Keith Best, from the charity Freedom from Torture, said that "if states continue to try to obtain evidence by torture - notoriously unreliable by the way - then those states have got to learn that if they want to prosecute people in the courts, those prosecutions will probably fail".
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