The panel decided by a majority of six to one that General Pinochet was not immune from extradition proceedings over alleged human rights abuses committed after 1988.

Lord Lamont wants General Pinochet free to return to Chile

The lawyer acting for the 83-year-old general gave the decision a cautious welcome.

Former Chilean foreign minister Miguel Alex Schweitzer said: "Compared to what we had before this is good."

Anti-Pinochet groups also claimed the result as a victory.

Vicente Alegria, of the Association of Chilean Exiles in the UK, said: "I am not disappointed. Pinochet is still under arrest and there are crimes for which he can be extradited."

Mr Alegria said there were still 40 offences being considered by Spanish prosecutors which occurred after the cut off date in 1988.

He said: "These are serious crimes and there are still very many of them. There is no reason why Pinochet will not be extradited."

Human rights group Amnesty International said the ruling sent out a clear message to other dictators.

Pinochet saga 'a farce'

A spokesman for the group said: "The Pinochet case represents a milestone for the international human rights law.

"The law rather than politics should determine whether Pinochet and anyone else accused of similar crimes is in fact guilty or innocent."

The group said it regretted that the Law Lords had found procedural obstacles "to bringing Pinochet to justice based on the UK extradition law", saying the crimes he was accused of were covered by international law long before 1988.

Lord Lamont, a supporter of General Pinochet, said he believed that Mr Straw should now withdraw his permission to proceed, effectively setting Pinochet free.

He said: "Ninety per cent of the charges against the general, in the opinion of the Law Lords, should not be offences for extradition.

"They drastically scaled down the charges for extradition and therefore the home secretary should withdraw his authority to proceed.

"The whole thing is a farce. It should never have been able to get this far."

Anti-Pinochet demonstrators outside the House of Lords clapped and cheered on hearing the Law Lords' ruling.

Carlos Reyes warned the general is still powerful

One of the protesters, Carlos Reyes of Chile Demacratico, who spent two years in a Chilean concentration camp, said: "It has been 25 years waiting for today and there is still one stage more.

"We cannot forget that General Pinochet is a very powerful man and he has very powerful allies and will continue fighting.