"A demarche was made to the US Embassy in Islamabad to register our concerns, in particular the slander campaign against Pakistan. Our Embassy in Washington has also been asked to ascertain details," said a statement issued by the Foreign Office here.
The Foreign Office statement lauded the role of Fai, who was arrested in Virginia earlier this week for allegedly funnelling at least four million dollars from Pakistan's spy agency into American political activities with the aim of influencing American policy on the Kashmir issue.
"We appreciate the contributions made by the Kashmiri American Council and Dr Ghulam Nabi Fai for the cause of Jammu and Kashmir," the statement said.
It contended that the Kashmir issue is "one of the oldest disputes on the agenda of the UN" and that there were "several UN Security Council Resolutions on the subject that affirm the inalienable right of the Kashmiris to self-determination".
The Foreign Office claimed that "upholding fundamental rights of Kashmiris is the fundamental responsibility of the international community and all conscientious people who value human rights and values".
It contended that 62-year-old Fai's Kashmiri American Council "has been working towards this end and Kashmiris appreciate and applaud its services".
It added: "Campaigns to defame the just cause of the Kashmiri people will not affect its legitimacy. However, the statement noted that Fai, who was born in Jammu and Kashmir and left India in the 1980s, was "a US citizen".
Fai was arrested on Tuesday morning. His preliminary detention hearing was held today at a court in Alexandria, near the US capital, and it has been postponed till next Tuesday.
Fai and Zaheer Ahmad, 63, a US citizen and resident of Pakistan, faced five years in prison if found guilty to the charges they are facing.