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Jailed PhD student Mathew Hedges who was jailed for life in the UAE over spying has been given a presidential pardon, sources have said.

Hedges was among more than 700 prisoners pardoned by UAE President Sheikh Khalifa bin Zayed al-Nahyan on the occasion of National Day.

"Mr. Hedges will be permitted to leave the UAE once formalities are completed," the statement said, according to AFP.

But Abu Dhabi has come under fire after showing a video of Hedges confessing to being a spy, and still insisting the academic works for British intelligence agency MI6.

UAE officials screened the video at a conference on Monday, where he allegedly says he is a member of MI6. Abu Dhabi claims he approached Emirati officials asking for sensitive information.

The UAE has been condemned by human rights groups for legal irregularities and the alleged torture of detainees.

Hedges' wife, Daniela Tejada, who has campaigned for his release, welcomed the news of his pardon and told Sky News that "she cannot wait to have Matt back home".

Tejada said that she hoped her husband would be released soon following the pardon.

But she also said she was "disappointed" by the UAE's claims that there had been "due process" in the court process.

Hedges court was held behind closed doors with evidence not presented to the public.

British Foreign Secretary Jeremy Hunt said the pardon was "fantastic news" but remained disappointed that the UAE's charges of spying still stand.

"Fantastic news about Matthew Hedges. Although we didn't agree with charges we are grateful to UAE govt for resolving issue speedily," Hunt said on Twitter.

The case has sparked anger in the country, where there have been calls for his release.

Hedges was detained at Dubai airport on 5 May and held in solitary confinement until his court hearing six months later.

He has denied the charges against him, with his family claiming he was forced to sign a confession in Arabic.