Pakistan's Taleban movement, which is close to Al-Qaeda, said it was behind the brazen assault by militants armed with rocket-propelled grenades and AK-47 assault rifles.
A police official said most of the escapees from the jail in the northwestern town of Bannu were militants.
"I don't remember the exact time, but it must have been way past midnight. There were huge explosions. Plaster from the ceilings fell on us," said prisoner Malik Nazeef, speaking by mobile phone to Reuters from the jail in the town of Bannu.
"Then there was gunfire. We didn't know what was happening." While the Taleban in neighboring Afghanistan have staged several jail breaks, such attacks are rare in nuclear-armed Pakistan, a strategic US ally and one of the most unstable countries in the world.
"We have freed hundreds of our comrades in Bannu in this attack. Several of our people have reached their destinations, others are on their way," a Taleban spokesman said.
The claim could not be immediately verified.
The attackers fired rocket-propelled grenades at the black, metal gates of the prison, blowing them open. Debris was strewn on the ground inside, including locks that were shot off doors. Walls were pockmarked with bullet holes.
An assault of this scale will likely generate fresh questions over Pakistan's progress in fighting militancy since joining the US-led campaign against militancy, launched after the Sept. 11, 2001, attacks.
Pakistan's performance has come under more intense scrutiny since US special forces in May last year found Osama Bin Laden in a Pakistani town, where he had apparently been living for years, and killed him in a secret raid.
Pakistani officials describe Bin Laden's long presence in the town of Abbottabad as a security lapse and reject suggestions that members of the military and intelligence service were complicit in hiding him there.
The prison break could deal a psychological blow to security forces following repeated government assertions that security crackdowns have weakened militant groups.
Pakistan is seen as critical to US efforts to stabilise Afghanistan yet Pakistan faces its own daunting security problems.
The Tehrik-e-Taleban Pakistan (TTP), or Taleban Movement of Pakistan, is seen as the biggest threat, staging suicide bombings and attacks on military compounds.
In the unruly ethnic Pashtun tribal areas near the Afghan border, the Taleban control large pockets where they use floggings and beheadings to impose their version of Islamic law.
The Pakistani Taleban are closely linked with the Afghan Taleban. They move back and forth across the unmarked border, exchange intelligence, and provide shelter for each other in a region US President Barack Obama has described as "the most dangerous place in the world.”
A loose alliance of a dozen groups, the TTP began its battle against the state in 2007, after a bloody army raid on Islamabad's Red Mosque, which was controlled by its allies.
The assault, ordered by Musharraf, was widely seen as the event that sparked a full-blown Islamist militant campaign to toppled the government.
A police official identified one of the inmates who escaped as a "dangerous prisoner" named Adnan Rasheed who took part in one of the attempts to kill Musharraf.
"He was a mastermind in (one of the attacks) on Musharraf. These people came for him and took another 383 people too," the official told Reuters, speaking on condition of anonymity.
Nazeef described how tall, bearded men with AK-47 rifles yelled "God is Greatest,” fired their weapons at the prison's ceilings, and asked inmates about Rasheed's whereabouts.
"One of them had a large hammer and tried to break the lock of our cell. It didn't work so they shot the lock off with their guns. They had wireless sets and were talking to each other. One of them then said that they had found Adnan Rasheed," he said.
"The entire activity in our block lasted almost an hour. I saw only 15 to 20 men but from the sound and gunfire, I could tell there were many more. None of them were wearing masks." Paramilitary troops and security forces later sealed off the Bannu Central Jail. Of a total 944 prisoners there, 384 escaped, said another police official.
