Fugitive Nadir given bail – if he returns to Britain after 17 years

Old Bailey judge Mr Justice Bean said he hoped it would end the "legal limbo" which existed since Nadir fled Britain for Northern Cyprus 17 years ago.

He quashed an arrest warrant for him and imposed 10 conditions on bail. They included a requirement for Nadir to be at the Old Bailey for a hearing on September 3 and submitting to electronic tagging.

Nadir, 69, was facing 66 counts of theft involving 34m fraud allegations in May 1993 when he flew from Britain to the northern zone of the Mediterranean island, which has no extradition treaty with Britain.

The Conservative Party donor fled Britain after his Polly Peck business empire collapsed.

He had appeared in court the previous year but had not technically surrendered to his bail. So, the judge said, a subsequent arrest warrant, issued on the basis that he had breached his bail, was not valid.

His legal team told the court he was now willing to return to face trial if he was granted bail. The Serious Fraud Office had agreed not to oppose bail if the stringent conditions were imposed.

But Victor Temple QC, prosecuting, said Nadir should return first and not use the court "as a bargaining chamber".

Mr Justice Bean said: "I think it is desirable that the legal limbo as to Mr Nadir's bail status should be brought to an end and he should be given the opportunity to submit to the jurisdiction of this court by attending in person."

The conditions also include depositing 250,000 with the court as a security before returning, giving notice of his flight and surrendering travel documents.

Nadir will have to apply for a British passport before he can travel, the court heard.

The judge said Nadir probably thought he was breaching his bail conditions when he left Britain – but it turned out he was not.

He added: "As it happens, and more by luck than Mr Nadir's judgment, there is today no warrant for his arrest."

If Nadir did not turn up, a legal warrant could now be issued which could be enforced outside northern Cyprus.

Earlier, William Clegg QC, defending, said Nadir had a "determined intention to return to this country in order to stand his trial".

He added: "At this moment in time, Mr Nadir is not in breach of bail or unlawfully at large.

"He is in legal limbo as the result of slipping through the web of legislation governing the granting and surrendering of bail. He is an extremely lucky man to find himself in this position."

On his return, Nadir, who has a new wife much younger than himself, will be met by Serious Fraud Office investigators at the airport. The court hearing in September is likely to be a formality to fix the date of the long trial not likely to take place until next year.

A statement from solicitors acting for Nadir said: "Mr Asil Nadir is extremely satisfied with the outcome of the hearing and looks forward to attending the Old Bailey on September 3 and beginning the process of clearing his name and proving his innocence."