An Australian court has refused to extradite an alleged Nazi war criminal to his native Hungary.

As an officer in the Nazi-allied Hungarian army during the Second World War, Charles Zentai is accused of beating a 14-year-old Jew to death for not wearing a yellow star. Now 88, he denies the charges, claiming he was not in Budapest at the time. He has been fighting extradition for five years.

Last week, the Australian Federal Court overturned an extradition order made in October 2009, finding that alternatives, including prosecution at home, had not been explored sufficiently. Justice Neil McKerracher ruled that a trial in Australia would be "the more humane solution" and that it would be oppressive to extradite someone of advanced age and poor health.

It was "a sad day for Australian justice", said Dr Efraim Zuroff of the Simon Wiesenthal Centre.

Mr Zentai is one of SWC's 10 most-wanted suspects.

The Australian government has not said whether it will mount a further challenge. But Dr Zuroff said he will continue to push for an appeal.

He said: "The whole issue of his age is irrelevant. The passage of time in no way diminishes the guilt of the killers."