The prospect of there ever being a successful prosecution against an alleged Nazi war criminal in Britain receded yesterday when Szymon Serafinowicz, 86, was ruled incapable of standing trial for murder.

After police investigations costing pounds 5m; another pounds 2m in prosecution costs, a magistrates' committal and a nine-day Crown Court hearing, Mr Serafinowicz walked free, apparently too frail and confused to face three specimen counts of murdering Jews.

Prosecutors insisted last night that they would not be deterred from future prosecutions of this nature. But the result of the case and its huge cost throws serious doubt on that.

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The seven-man, five-woman jury took two-and-a-half hours to decide that the frail and increasingly dishevelled Mr Serafinowicz was unfit to be tried for his alleged part in the systematic slaughter of the 3,000 Jewish inhabitants of the Mir district of Byelorussia, now Belarus, in 1941-2 while it was under Nazi occupation.

They had heard medical evidence that he was suffering from dementia, probably Alzheimer's Disease, which meant he was incapable of instructing his lawyers, understanding the evidence or following the trial. Sir Nicholas Lyell QC, the Attorney-General, immediately entered a plea of nolle prosequi, which has the effect of permanently staying the proceedings.

Nicholas Bowers, Mr Serafinowicz's solicitor, denied that his client had faked his condition. "My client is an elderly man whose health has deteriorated rapidly in recent years, during which he has suffered the death of his wife and then the incredible pressure of these proceedings. It would have been impossible and unrealistic for my client to endure the physical and mental strain of a lengthy and difficult trial."

A retired carpenter of Banstead, Surrey, Mr Serafinowicz settled in Britain after the Second World War with his Polish-born wife. Sir Derek Spencer QC, the Solicitor-General, said that he had volunteered for the local police force in Byelorussia after the German invasion of the USSR and was promoted by the Germans to district commander of the unit in Mir, where the Jews were forced into a ghetto. Mr Serafinowicz's counsel, William Clegg QC, said he was only a police sergeant, and had saved people from the Nazis.

The prosecution was launched under the 1991 War Crimes Act which allowed such charges to brought for the first time in Britain, even though the alleged offences happened abroad. At committal proceedings at Dorking magistrates' court last year, Mr Serafinowicz was committed to stand trial on charges of participating in the murder of Jews in Mir and two nearby villages.

The jury's decision will revive arguments raised in the passage of the War Crimes Bill through the House of Lords that too many years have passed to make prosecutions involving the Second World War viable or fair.

Last night Tory peer Lord Tebbit said: "Today's events have only confirmed me in my belief that this whole affair has been a waste of the time of Parliament, the police and the judiciary and a colossal waste of public money which would have been better spent on caring for the people who suffered as a result of the Second World War.

"I never believed that anybody after all these years would be found fit for trial, would be found guilty and then be found fit to serve a prison sentence. That was obvious years ago."

But the Crown Prosecution Service insisted yesterday that decisions on whether to bring five further potential prosecutions would be reached on their individual facts. Supporters of the legislation urged cases to be brought on their merits.

Lord Merlyn-Rees, a former home secretary and chairman of the all-party Parliamentary War Crimes Committee, said: "If there is evidence which will stand up in a court of law, then future prosecutions should take place, irrespective of what happened at the Old Bailey."

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