The paedophile who killed Sydney schoolgirl Samantha Knight more than 30 years ago will be released from jail within days after a judge rejected an application to keep him behind bars for another year.

Justice Richard Button on Tuesday instead imposed a five-year extended supervision order with stringent conditions on Michael Guider.

The now 68-year-old pleaded guilty in 2002 to the manslaughter of nine-year-old Samantha, who went missing after leaving her Bondi home for school on 19 August 1986. Her body has never been found.

His 17-year jail term has expired, but he was placed on an interim detention order which expires on Thursday.

The New South Wales attorney general, Mark Speakman, had made an application for a one-year detention order. He is now seeking urgent advice on the prospects of appealing Tuesday’s decision and whether Guider can remain in jail while an appeal is sought.

Tess Knight, the mother of Samantha Knight, speaks outside the NSW supreme court in Sydney on Tuesday. Photograph: Dean Lewins/AAP

Speaking outside the supreme court in Sydney on Tuesday, Samanthas’s mother Tess Knight told reporters she was angry Guider was set to walk free in a few days.

“I am not disappointed, I am angry,” Tess Knight said.

She said while she took some consolation in the fact he would be kept under very strict supervision for five years, she said she was shaking inside at the prospect of his release.

“I see the effect that this has had on the people he abused as children, who are now young adults,” she said. “They have to live with the thought of him walking around having the freedom they don’t have.”

Lisa Giles, who was abused by Guider as a child, told reporters: “A child molester and a child killer will be released among us this week.

“It’s not over and we can see the inadequacies of the justice system very clearly today. And he will reoffend and when he does, those people who enabled this will be held accountable.”

When sentenced for Samantha’s death, Guider was already serving time for numerous sex offences against more than a dozen other children between 1980 and 1996.

The judge said the hearing was to assess the risk Guider posed in the future, rather than imposing punishment for his prior offending.

He found that a further period of incarceration would not serve any rehabilitative purpose.

While it could not be said definitively that Guider’s sexual interest in children had disappeared, the judge considered he had done all that could be done in terms of rehabilitation in a prison setting.

Three experts, highly experienced in psychology and psychiatry, had all agreed Guider’s risk could be reasonably managed under a stringent and lengthy system of supervision within the community, the judge said.

He had taken note of Guider’s good behaviour when he was on escorted day leave from jail.

The 56 conditions of the supervision order include electronic monitoring and providing a weekly schedule of his movements three days in advance.

He must not without prior approval attend any place used solely or mainly for the sale or display of sexually explicit material, or for providing sexual services or sexually explicit entertainment.

Guider also must not approach or have contact with anyone he knows or reasonably should know is under 18, other than incidental contact in a public place, unless he has written permission.

He is not allowed to change his name or use any other name without the approval of his supervisor, nor can he significantly change his appearance.

Unrelated to Guider’s case, next week laws will be reintroduced to federal parliament that could see child sex offenders face life behind bars.

Under the laws, which failed to pass in 2017, predators who commit serious crimes against children could also face mandatory minimum sentences, while repeat offenders would find it much harder to get bail.

Several new offences would also be created, targeting those who administer websites that distribute child sex abuse material.

The vast majority of child sex offences are state crimes, so the proposed shake-up of commonwealth laws is largely aimed at paedophiles who offend online or overseas.

The federal attorney general Christian Porter said on Tuesday: “It simply beggars belief that nearly a third of all child sex offenders who were sentenced last year were not ­required to spend a single day behind bars.

“And when jail terms were handed out, the average length of time that offenders spent in custody was just 18 months.”

The Coalition tried to pass similar legislation in 2017, but it was knocked back after Labor baulked at the inflexible nature of the mandatory sanctions included in the bill.

The federal opposition argued juries would be less likely to convict if they knew judges had no discretion on sentencing.

Labor generally opposes minimum mandatory terms, but has made some exceptions at both state and federal levels.

Porter is urging the opposition to reconsider its stance. “If ever there was a policy that needed Labor to rethink their position, this surely must be it.”

Labor does appear open to reconsidering the bill. “Every child must be kept safe,” the shadow attorney general, Mark Dreyfus, said. “Labor strongly supports keeping children safe and holding these horrendous individuals to account.”

The Australian federal police received 18,000 reports of child exploitation last year, which was almost double the number of complaints made the previous year.

The home affairs minister, Peter Dutton, said he wanted to get the bill through parliament as quickly as possible.

“It’s not a silver bullet, but it sends a clear message of deterrence,” he said. “We need to be realistic about the threat and we need to lock up those people that are doing the wrong thing.”

The proposed penalties will not apply to people aged under 18. The legislation will be introduced to parliament next Wednesday.