The BBC's Colin Blane: Reid "hoped to exploit a loophole in the law"

Alexander Reid, who has been held there for 30 years, argued he could not be detained because he is no longer receiving treatment.

Reid, 49, was ordered to be detained without limit of time at the maximum-security hospital for stabbing to death Angela McCabe in her Glasgow home in 1967.

His plea of culpable homicide was accepted because of his mental state.

The family of Ms McCabe welcomed the judgement.

Kevin McKenna, nephew of Angela's husband, said: "The family are relieved at the decision especially my uncle Gerry and his daughter Margaret.

"We hope this will be an end to it and they can get on with their lives. We are happy that the threat of this happening to others now appears to have been removed.

"However they also acknowledge that this individual Alexander Reid is also an extremely sick man and that he is also some mother's son and that they are not the only victims in this."

Hospital General Manager Dick Manson said: "We are pleased that their Lordships have agreed with our clinicians that Mr Reid should remain at the state hospital.

"Their decision clarifies the position for all concerned."

Disorder 'untreatable'

Despite boasting that he would kill again if freed, Reid had said that he should be released because medical staff admitted his personality disorder is untreatable.

Under the Mental Health (Scotland) Act 1980, offenders cannot be detained in hospital if their condition does not respond to treatment.

Scottish law does not allow "preventative detention".

A sheriff at Lanark had ruled that he could continue to be detained, but this was overturned by three judges at the Court of Session.

Now that decision has been overturned by Scottish Secretary Donald Dewar's appeal in the House of Lords.

The appeal was heard by Lords Clyde, Hope, Lloyd, Slynn and Hutton.

Judgement 'presented problems'

Lord Clyde said the situation had presented a difficult problem for courts.

"Views have evidently differed in the past as to the extent to which such persons can benefit from medical treatment," he said.

"While further study and research is continuing it may be the more difficult to affirm with confidence that the condition in any particular case is truly unresponsive to treatment or that no alleviation or stabilisation can be achieved in the secure environment of a hospital."

Lord Hutton said the present situation meant the sheriff might be obliged to discharge a dangerous psychopath from hospital because evidence showed that treatment would not help.

"This is a problem of great difficulty which, in my opinion, can only be resolved by parliament," he said.

The government has indicated it will act to change the law to ensure a similar situation cannot arise again.