The Department of Justice made a mistake when it decided it cannot compensate a man wrongly convicted of an IRA plot to bomb soldiers, a judge ruled.

In the High Court, Mr Justice Stephens quashed the department’s decision taken in Gerard Magee’s case and ordered it to consider whether to exercise a discretionary power on his bid for a pay-out.

After a non-jury trial in 1990 Mr Magee (48) from Carrickmore, Co Tyrone was found guilty of involvement in an alleged bid to kill soldiers on patrol in Antrim.

He served half of a 20-year jail term before being released under the Good Friday Agreement.

His convictions were quashed in 2001 after the European Court of Human Rights held that he only made a confession after being denied access to a lawyer for two days, breaching his right to a fair trial.

A year later the NIO refused his bid for compensation on the basis that the overturning of his convictions was not based on any new or newly discovered fact.

Mr Magee made a fresh application following a landmark Supreme Court ruling in 2011 involving Sinn Fein MLA Raymond McCartney and Derry journalist Eamonn MacDermott, who were both cleared on appeal of murdering an RUC officer in 1977.

It held that the test for payments to those wrongly convicted should be redefined.

But despite asking the authorities to review his case, the Department of Justice stated in March 2012 he was ineligible.

Lawyers for Mr Magee issued judicial review proceedings, claiming the refusal to deal with the claim for compensation was unreasonable. They contend it breached the department’s duty to make payment.

Ruling on the case yesterday, Mr Justice Stephens rejected an argument that the authorities were under an obligation.

But he held that there is a discretionary power to reconsider the Secretary of State’s decision.

Following the verdict Mr Magee’s solicitor, Fearghal Shiels of Madden and Finucane, confirmed he will now be pressing the Justice Minister, David Ford, for compensation.