Abu Suleiman seems like an ordinary young man. A 33-year-old Saudi with a small face and a thin beard, he works for an equity research company in Riyadh.

But he has a secret: for the past year the Saudi authorities have been paying his family $800 a month while they work on re-educating him not to be a jihadi.

This former inmate of Guantánamo Bay is the product of a rehabilitation programme, being watched with interest in Britain and the US, which has already seen 700 one-time jihadis released from Saudi jails and returned to society.

As part of the programme he was given an $18,000 present and car by the government on his wedding day. It was a striking turnround for a man who spent four years at Guantánamo after being captured fighting in Afghanistan's Tora Bora region.

The young jihadi, who claims to have met Osama bin Laden several times, was one of 65 Guantánamo prisoners transferred to Saudi Arabia.

By the time he arrived in Riyadh, he was disillusioned with jihad. Chosen for the Saudi experiment in counter-terrorism started in 2004, Abu Suleiman – not his real name – is presented as one of the programme's successful graduates.

The de-radicalisation programme uses a mix of heavy religious and psychological education on the "good belief in Islam" to rehabilitate militants.

Chosen candidates are plucked from the Saudi prison system, where they enjoy few rights and are sometimes tortured. They are subjected to six to 10 weeks of de-brainwashing in a programme involving 100 official clerics and 30 professionals, including psychologists.

Their families are paid a monthly stipend of up to $1,500 to forestall any al-Qaeda networks from paying relatives to keep them on side. Prisoners deemed worthy of graduation are then sometimes assisted in finding jobs and even wives.

"They settle down when they marry," says Abdulrahman al-Hadlaq, chairman of the rehabilitation committee.

Before graduation, the detainees are allowed out for a week at a time, while the authorities monitor their moves.

Though speaking in the presence of interior ministry officials, Abu Suleiman says the de-radicalisation programme works well for militants who went abroad to fight but is less effective with members of domestic cells who have resisted the regime since 2003.

The interior ministry says that out of 2,000 detainees selected for the programme, more than 700 have graduated and only nine have relapsed with "minor violations".

But turning militants around is tricky for a state that has sometimes seen fit to espouse the merits of jihad – notably against the Soviet Union in Afghanistan in the 1980s. So the clerics employed by the interior ministry have devised their own rules for legitimate jihad based entirely on the political interests of the Saudi state.

Jihad, they tell detainees, requires the permission of the ruler and of their parents as well as a religious edict from official clerics. It also cannot be waged against countries with good relations with the state.

For all the impressive figures, the programme has its doubters. "If people were so simple and believed the government to that extent, we wouldn't have militants fighting the regime," says a Saudi lawyer. "People who change their minds about jihad are looking for any way out. Anyway, the real problem is not them, it is the new recruits being picked up."