A Jersey court has ordered Curtis Warren to pay £198m after the drug dealer failed to prove he had not earned that sum in a lifetime of high-level criminality.

Warren, a 50-year-old former bouncer from Liverpool famed as the only drug smuggler to make it on to the Sunday Times Rich List, will be handed a default sentence of 10 years unless he surrenders the whole amount in the next 28 days.

He told the Guardian last month that he was unable to pay such a "fantastic" amount of money, saying the case against him was ridiculous.

But a panel of lay judges – known in Jersey as jurats – disagreed, and on Tuesday ordered what Jersey's attorney general described as one of the largest-ever confiscation orders made in Europe.

The case against Warren centred around cocaine trafficking between 1991 and 1996 – much of it for which he has never actually been convicted.

Warren did not give evidence at the court in St Helier after the UK attorney general refused to grant him immunity from future prosecutions in the UK as a result of anything he may have cited in evidence.

Tony Barraclough, Warren's long-serving UK barrister, said his client would "no doubt appeal". He said: "Bearing in mind Warren is in prison, with the communications restrictions that entails, even if he had this amount of money, how is he possibly able to settle £198m in 28 days? It just shows a failure to grasp reality."

The prosecution claimed Warren – who has been in prison for all but five weeks of the last 17 years – had shipped cocaine directly from cartels in South America to Europe on many occasions and got away with it. The shipments, said the crown, ranged from 500kg to consignments of several tons, generating huge profits of about £20m a ton.

In a statement issued on Tuesday, the attorney general in Jersey, Timothy Le Cocq QC, said: "The confiscation proceedings are the result of several years of extensive investigation into the criminal career and financial affairs of one of Europe's most notorious organised criminals."

Barraclough said the confiscation order was the result of proceedings unrelated to any money made as a result of the 13-year sentence Warren was given in Jersey in 2009 after being found guilty of a plot to smuggle £1m of cannabis on to the island.

Barraclough said: "The Jersey conviction triggered a legal process which enabled the Jersey authorities to investigate his alleged activities outside Jersey and the test was "on the balance of probabilities". The proceedings in Jersey must be considered against the backdrop of the opinion of the Privy Council in relation to the activities of the Jersey police and other persons in authority in the original cannabis case."

In a statement, the National Crime Agency said: "The prosecution was supported by specialist evidence provided by the National Crime Agency (NCA). The agency's expertise in areas including telephone communications analysis and decoding Warren's conversations proved crucial in demonstrating how he was able to orchestrate drug deals from his prison cell and quantifying the vast wealth he has accumulated through his criminal activity."

Steve Baldwin, NCA regional head of investigations for the north-west, said: "The authorities in Jersey have achieved a tremendous result against Curtis Warren, one of the most prolific drug dealers of a generation.

"Making sure that criminals do not profit from their crimes is key to making the UK less of a target for organised crime, and we will be relentless in pursuing their money. This is an excellent example of how the NCA uses its specialist resources to complement partner agencies to target the most serious organised criminals."

In 2011 Warren went to the Privy Council in London, the highest court on legal matters in Jersey, to ask for his conviction to be quashed. He argued there that the Jersey police had illegally bugged a hire car used by one of his co-defendants.

The appeal was narrowly dismissed, with one of the judges, Lord Rodgers, saying that "were the Jersey police to act in this sort of fashion in future, realistically the court might have no alternative but to strike the balance decisively in favour of indicating the rule of law, however undeserving the accused."

If Warren somehow pays the £198m demanded, he could be released as early as January 2014 after serving half of his sentence.

• The subheading on this article was amended on 6 November 2013 to better reflect the article.