An Australian man imprisoned in Bulgaria says he is being held for ransom after Bulgarian authorities refused the Federal Government's request for him to complete his sentence in Australia.

Jock Palfreeman, 25, has served five years of a 20-year sentence after being found guilty of "murder with hooliganism" following the controversial 2007 death of 20-year-old Bulgarian Andrei Monov, who died from a single stab wound under his armpit.

In a Radio National documentary which will air on Sunday, Palfreeman said the Bulgarian government had officially denied an Australian government request to transfer him to an Australian prison.

In 2009 a Bulgarian court ordered Palfreeman to pay around 400,000 Bulgarian Lev ($252,000) in compensation to his victims and their families.

"Essentially I'm being held for ransom," he said.

"If family and friends pay (the money) then I can transfer to Australia legally."

Palfreeman said he was out with friends in Bulgaria's capital Sofia on December 28, 2007, when he heard a man shout the Bulgarian word for "nigger".

He said the man and fourteen of his companions ran to two young Roma, or gypsies, and were seriously assaulting them when Palfreeman stepped in and tried to stop the fighting.

"How can anyone ask me why didn't you walk away when you're seeing 15 guys beat another guy because he's got black skin? I mean what century are we frikkin' living in?" he said.

Palfreeman was later convicted of Mr Monov's murder despite allegations crucial CCTV footage and witnesses went missing, and forensic evidence that suggested the fatal blow did not come from Palfreeman's knife.

Friends of Mr Monov who were present at the incident also contradicted their original police statements during court testimonies.

Palfreeman's father, Simon Palfreeman, said the debt had been accruing at around 15 to 20 per cent a year.

"I think at this stage we would do whatever we could to get Jock back because I think the longer he stays there the harder it will be to get him out," he said.

"They haven't said how much (money Jock owes), they haven't said if that was paid whether or not he would then be eligible to be transferred, they've just said he's not eligible for even discussing the case until this money is paid."

Mr Palfreeman estimated the debt was now about $600,000.

Director of human rights group the Bulgarian Helsinki Committee, Dr Krassimir Kanev, said Jock's best option was to pay the Bulgarian government.

"My advice is to collect this money, there's no other way at present, that would automatically take him back to Australia," he said.

The inside of Palfreeman's prison cell. ( ABC: David Barbeler )

"Compared to prisons that I have seen in former Soviet Union, and I have been to many countries in the former Soviet Union such as Armenia, Georgia, Russia, Ukraine, I would think that the Bulgarian prisons are worse even compared to those."

Jock Palfreeman told Radio National's 360 Documentaries he would be much better off in an Australian jail.

"Transferring to Australia would mean I would be treated like every other prisoner as opposed to here," he said.

"(In Bulgaria foreigners) are legally eligible for everything but they don't give it to us. Foreigners are not given parole."

The parents of the murdered man have previously said Palfreeman was a danger to society who deserved a life sentence without parole.

Palfreeman was 15 days into a hunger strike when Radio National producers were allowed inside the small cell he shares with up to eight men.

He said he was protesting against the poor quality of prison food, violent guards and numerous other injustices.

"The Bulgarian groups are treated one way, then the foreigners are treated differently and then from the foreigners I'm treated even worse," he said.

"I'm like the scum of the scum in this prison."

A spokesman for DFAT said the Australian government would not assist the Palfreeman family with the debt owed to the Bulgarian government.

"The Australian Government does not provide funds to pay for financial penalties imposed on Australians by courts overseas," the spokesman said.

A spokesman for the Attorney-General's department could not elaborate on the status of transfer negotiations.

"Due to the confidential nature of transfer applications and privacy considerations under Australian law, the Government does not confirm or disclose details of International Transfer of Prisoners'... applications," the spokesman said.

Comment has been sought from the Bulgarian Ministry of Justice.

Palfreeman has lodged an appeal against his conviction with the European Court of Human Rights (ECHR), however it is expected to take up to five years to make a ruling.

If the ECHR finds in Palfreeman's favour, he would be retried in the same Bulgarian courts, Mr Kanev said.

"It's not very clear that at the retrial he would obtain the result that he wants (it) to," he said.