Jon Venables has been granted parole after he was sent back to jail for two years for accessing child pornography.
He had his parole revoked in 2010 and was jailed for two years after admitting downloading and distributing indecent images of children.
Earlier this year James’s mother Denise Fergus and father Ralph Bulger addressed Venables’ parole hearing and pushed for him to remain in prison.
But yesterday the Parole Board confirmed that the decision has been made to release Venables back into the community.
A spokesman said: “We’ve had confirmation that all parties have been told and we can confirm that it was a release decision. He will be released.”
Mr Bulger’s solicitor Robin Makin said: “The decision to release Jon Venables is misguided and fills Ralph with terror.
“Ralph fears that an innocent person may be mistaken for Jon Venables and be injured or even killed. If such occurs then Ralph will feel guilty of not having done enough to have prevented such an obvious tragedy.”
Speaking on her official Twitter page, Mrs Fergus said: “Just don’t believe what I’ve got 2 go through. AGAIN.”
Shortly afterwards she posted: “Venables is getting released”, later tweeting: “Thanx all 4 ur very kind an lovely messages I dont no wat 2morrow is gonna bring but can we all get #justice4james trendin he so deserves it.”
This year marks the 20th anniversary of James’s murder.
The two-year-old was abducted, tortured and killed by Venables and Robert Thompson in Liverpool in February 1993.
Venables and classmate Thompson, who were just 10 years old at the time, abducted James from the Bootle Strand shopping centre before carrying out the murder which shocked the nation.
The two boys were jailed for life but released on licence with new identities in 2001.
Venables had his parole revoked in 2010 and was jailed for two years after admitting downloading and distributing indecent images of children.
Mr Bulger, who earlier this year released a book called My James, spoke of how, in his darkest moments, he blamed his former wife for letting their son out of her sight - a reaction which now makes him feel deeply ashamed.
He also said he downed two bottles of whisky a day to blot out the pain and that he thought about killing himself in the wake of the tragedy.
Mr Makin added: “Ralph Bulger and the paternal family of James Bulger are disappointed and dismayed to have been advised that the Parole Board have decide to release Jon Venables back into society.
“In 2011 the Parole Board determined that it was ‘not safe’ for Jon Venables to be released. It is not known what has changed. No reasons for the decision have been given.
“For Ralph and his family the living nightmare continues and is exacerbated by the problems now created by the reckless decision to free Jon Venables without any publicly disclosed safeguards.
“Jon Venables is a sex offender who has murdered once and made it clear when posing as the mother of a child that an ‘ultimate thrill’ for him was the sexual abuse of a child.
“The authorities have already experimented with Jon Venables living a lie and it did not work.”
Mr Makin said it was not known if the authorities were seeking to give Venables a further new identity “at considerable public expense” but he said that doing so would be an “unprecedented and unjustifiable risk”.
“Jon Venables ought to be subject to strident surveillance and supervision. Nothing has been indicated as to what is proposed and, as is well known, the supervision previously attempted was inadequate and led to Jon Venables breaching his licence conditions and entering Merseyside,” Mr Makin said.
The solicitor said James’s family had a legal right to be consulted about Venables’ licence and release conditions and that they had “no confidence that the authorities will be able to control what may now happen.”
A Ministry of Justice spokesman said: “The re-release of life-licensed offenders is directed by the independent Parole Board once they are satisfied they can be safely managed in the community.
“Their life licence lasts for the rest of their lives, and they may be recalled to prison at any time for breaching their licence conditions. Additionally, they will be subject to strict controls and restrictions for as long as their risk requires them.”
Solicitor Laurence Lee, who represented Venables during the murder trial, said: “I can fully appreciate what Denise and her family must be going through. This case has reared its ugly head yet again.
“As a lawyer I have to concede that at some stage he would have to be released. I can tell you for sure I have certainly not campaigned in his favour. I have got no loyalty towards him.”
He said the Parole Board had given no reasons for their decision, and had acted in “their usual unsubtle way”.
Mr Lee added: “He’ll continue to be on permanent licence and if he steps out of line he’ll be recalled yet again.
“I’ve always said that he may be at liberty but he’ll never be free in the true sense of the word.”