The 83-year-old will now have to endure a prolonged stay in Britain fighting Spain's attempt to bring him to justice for thousands of alleged murders.

BBC Legal Affairs Correspondent Joshua Rozenberg: The announcement could hardly have been more dramatic

The House of Lords dismissed an earlier ruling by the High Court that as a former head of state the general was immune from prosecution.

The Chilean President, Eduardo Frei, promptly reacted to the news by announcing he is sending his foreign minister, Jose Miguel Insulza, to London to appeal to the UK government for the former leader's release.

The House of Lords ruling is delivered

The Law Lords' decision was split between the five members sitting in judgment.

It was delivered in dramatic fashion with Lord Slynn and Lord Lloyd delivering their verdicts that the general should be allowed to fly home.

Lord Hoffman gives the deciding verdict

But then Lord Nicholls and Lord Steyn announced that they disagreed before the fifth judge, Lord Hoffman gave what was the deciding judgment.

His announcement was met with gasps inside the chamber, while outside the Houses of Parliament around 100 demonstrators were jubilant on hearing the news.

Many of them were victims and relatives of people who disappeared during the Pinochet regime and had waited for hours to hear the news.

Celebrating campaigners: "Now is the time to pay for your crime"

Around 50 more were outside the north London hospital where the general is under arrest, recovering from back surgery.

In Santiago, journalists and camera crews were attacked by Pinochet supporters, while the families of those who disappeared during his years in power celebrated by blowing their car horns.

Extradition battle starts

The judgment dismisses an earlier High Court ruling that the general was "entitled to immunity as a former sovereign from the criminal and civil process of the English courts".

Legal Affairs Correspondent Jane Peel: "There were gasps of amazement"

But despite this ruling, there is no certainty that Spain, and three other European countries, will get their way and succeed in extraditing the general..

He is due to appear before magistrates in London on 2 December should UK Home Secretary Jack Straw decide to go ahead with the extradition process.

Downing Street said it was not making any immediate comment following the judgment.

General Pinochet has been in London for two months having originally arrived in the UK to an official Foreign Office welcome.

On 9 October he underwent back surgery in a London private hospital, where he was arrested a week later.

His detention was prompted by a Spanish judge.

Baltasar Garzon's formal request for the general's extradition implicated him in 3,178 murders or "disappearances" during his 17 years of power in Chile.

This began with a bloody military coup in 1973. His regime's abuses are well-documented.

Reign of terror

In 1975 the United Nations recognised a deliberate policy of torture, and a year later concluded that such cases should be prosecuted as crimes against humanity.

General Pinochet (left) came to power via a 1973 coup

But the arrest this year has caused a major diplomatic row between Chile and the UK, two countries who have been long time allies, particularly during the Falklands war with Argentina.

Chile's ambassador to London, Mario Artaza protested that the general was entitled to diplomatic immunity.

"We will use all the instruments, using all diplomatic, political and all other arguments that exisit to defend our principle.

"We are not here to protect a dictator of yesterday, we are here to protect and defend our transition to democracy," he said.

Days before his arrest General Pinochet had drinks in London with his friend, the former UK Prime Minister Lady Thatcher.

Following the Law Lords' decision, she repeated her demand that the "old, frail and sick" general be released and allowed to return to Chile.