A "frustrated" Omar Khadr could be back in Canada by the end of May, with both Ottawa and Washington poised to approve his transfer from Guantanamo Bay, where the convicted war criminal has been held for almost a decade, The Canadian Press has learned.

A source familiar with the file said U.S. Secretary of Defence Leon Panetta was expected to sign off on the transfer within a week.

"It's on his desk, it's ready," the source said Wednesday.

"The U.S. has no concerns about [Khadr]."

Khadr has been caught up in a bureaucratic "Catch-22" since becoming eligible to leave the American prison on Cuba last October under terms of a plea agreement struck a year earlier.

The Toronto-born Khadr, 25, pleaded guilty before a much maligned U.S. military commission to five war crimes he committed as a 15-year-old in Afghanistan in July 2002.

In exchange, the Canadian citizen was given an eight-year sentence, with one year to be served in Guantanamo Bay and the remainder in Canada.

Prime Minister Stephen Harper's government has been in no hurry to approve the transfer request, which Khadr's lawyers submitted to both governments a year ago.

Instead, the source said, Ottawa has been scrutinizing the application far more closely than required, looking at issues such as his parole eligibility, which would essentially be almost immediate.

"I think they have stalled the proceedings — the U.S. would have sent him home a lot earlier if things had been worked out in Canada," the source said.

"The U.S. does not want to act summarily and sign off on his transfer without Canada having everything prepared and ready. It's a matter of diplomatic courtesy."

Given the process that must unfold, Khadr's return should come by the end of May, the source added.

Panetta waiting for Ottawa to agree to transfer

Pentagon spokesman Lt.-Col. Todd Breasseale confirmed Panetta was waiting for Ottawa to agree to Khadr's transfer, and the process was moving forward.

"It's a matter of ongoing, very sensitive discussion and consideration that involves everything from public safety to diplomacy," Breasseale said.

Panetta has only said negotiations were continuing.

"I don't have a specific timeline for signing it, but once those arrangements have been made, obviously we will approve the transfer to Canada," Panetta said in Ottawa this week.

In the Commons Wednesday, Public Safety Minister Vic Toews said only that the Americans had made no formal application for Khadr's transfer, and no decisions had been made.

"If an application were received, it will be determined in accordance with law," Toews said.

Khadr's Pentagon-appointed lawyer, Lt.-Col. Jon Jackson, who brokered the plea deal, said his client has had more difficulty dealing with the transfer delay than he did when he agreed to admit guilt.

"Omar is very frustrated — it doesn't matter to him who's arguing about it," Jackson said Wednesday from Washington, D.C.

"He just knows he's still at Gitmo, and that's all that matters to him."

The lesson for Guantanamo, Jackson said, is that "no matter what you have in writing," getting anything done is going to be "problematic" once governments get involved.

In an agreed statement of facts, Khadr admitted among other things to the murder of Sgt. 1st Class Chris Speer and to being an al-Qaeda terrorist who wanted to kill as many Americans as possible.

Held in maximum security facility

Since his conviction, Khadr has been held in Guantanamo's maximum security Camp 5.

However, the prison's youngest inmate and sole westerner has earned some privileges, such as recreation time and access to a media room, and has contact with a few other inmates.

Privately, some defence lawyers say their Gitmo clients have become leery of striking their own plea deals given the delay in returning Khadr.

Panetta appeared to acknowledge the concern, saying moving Khadr out would be "an important step."

"We've got others there, obviously, we would like to be able to move as well," Panetta said.

Once the defence secretary signs off, U.S. President Barack Obama is required to give 30 days notice to Congress of the pending transfer. Congress is not required to give its approval given the pretrial agreement.

To date, Khadr's legal team, which includes Toronto lawyer John Norris, has refrained from launching any court action to force the governments to expedite the move on the grounds that doing so would only cause further delays.

But patience is wearing thin.

"We've been patient enough," Jackson said. "If he's not back by the end of May, I think there are going to be serious problems."

More than anything, another source said, Khadr wants to be reunited with his mother and other family members in Toronto.

"The most important thing for Omar is family — to be with (his) mom, to be with his grandma," the source said.