The US has denied paying “blood money” to win the release of a CIA contractor accused of killing two men in Pakistan, but welcomed the end of a spat that threatened to damage relations between the two countries.

Raymond Davis was freed from a jail in Lahore Wednesday after relatives of the Pakistani victims received as much as $ 2.3 million in “blood money” compensation, according to media reports from Islamabad.

But in Washington, Secretary of State Hillary Clinton claimed in an interview with NPR “the United States did not pay any compensation”.

“The families of the victims of the incident on January 27th decided to pardon Davis. And we are very grateful for their decision,” she said.

White House press secretary Jay Carney told reporters that he had no “information that would corroborate” that the US paid the families of the men who were killed, but he declined to talk about it in detail.

State Department spokesman Mark Toner also declined to discuss “the details of his release beyond saying we did not pay compensation to the victims’ families. But beyond that, you’ll have to ask the families”.

Senate Foreign Relations Committee’s Democratic Chairman John Kerry welcomed Davis’ release as “a very important and necessary step for both of our countries to be able to maintain our relationship and remain focused on progress on bedrock national interests”.

Meanwhile, Scott Stewart, vice president of Tactical Intelligence at strategic think tank Stratfor said, “The way that this case has been resolved through this blood money process, is a resolution that is less likely to inflame public sentiment than if Davis had been released due to the fact that he had been found to have diplomatic immunity.”

However, “the radical parties, the people like the Pakistani Taliban who all along have been calling for Davis’ death are sure to attempt to agitate things”, he said wondering which way public sentiment rules.

Lisa Curtis, senior research fellow for South Asia at The Heritage Foundation, said the release of Davis was indisputably good news for the US and may temporarily improve ties between the two countries’ intelligence agencies.

But “it could also heighten anti-American sentiment in Pakistan, especially if the initial news reports that the families were pressured into accepting the blood money gain traction”, she said.

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