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Barry George is free to seek more than £1 million compensation as the victim of a miscarriage of justice after being cleared yesterday of the murder of the Crimewatch presenter Jill Dando.

The Times has learnt that the Government has not yet implemented laws passed four months ago that would have capped his claim for damages at £500,000.

The Ministry of Justice said that there was no limit on what Mr George, a convicted sex attacker and persistent stalker, could receive. He is also understood to be considering media bids for his story in excess of £100,000.

Ms Dando, 37, was shot in the head at point-blank range outside her home in Fulham, West London, in April 1999. Her murder is likely to remain unsolved. Police indicated that the case was effectively closed.

Mr George spent eight years in jail, having faced two Old Bailey trials and two appeals. His case was the subject of a prominent miscarriage of justice campaign. As the jury returned its unanimous verdict yesterday, his eyes welled with tears. He later told his solicitor: “I can’t believe it.”

His sister, Michelle Diskin, who led the campaign for his acquittal, punched the air and shouted “Yes” before breaking down in tears.

Scotland Yard said officially that it was disappointed with the outcome of the case, but senior sources told The Times that they were furious with the way the case ended. One said: “This was a year-long investigation which accrued a huge amount of evidence. The jury deliberated for less than eight hours — can they really say they gave due consideration to all the facts?”

The family of Ms Dando declined to comment on the verdict.

Mr George, who has a low IQ, mental health problems and epilepsy, left court with Susan Young, a psychologist who sat with him through years of legal hearings to ensure that he understood the proceedings. She said: “Mr George feels overwhelmed by the verdict as, throughout the trial, he did not dare to get his hopes up and he continually said to me in the dock he believed he would be convicted.”

She told The Times: “I have spent hours and hours with Barry George. I would seriously doubt that someone with his level of problems could carry out the murder. And I would expect someone who has his problems to let something slip, but he never has.”

Jeremy Moore, Mr George’s solicitor, confirmed that there would be a claim for compensation. It will be up to Jack Straw, the Justice Secretary, to decide if he is eligible. If so, the case will be passed to Lord Brennan, QC.

Reforms of the compensation scheme were included in the Criminal Justice and Immigration Act, which received the Royal Assent in May. They would have limited the maximum amount payable to Mr George to £500,000 because he had been in jail for less than ten years, but the capping clause has yet to take effect. The claim will cover loss of liberty, housing and living allowances and could increase if Mr George requires continuing specialist mental health care.

Commander Simon Foy, of the Metropolitan Police, said: “We are disappointed by today’s verdict, but especially disappointed for Jill’s family and friends. However, we respect the decision of the court. The investigation into her murder was complex, thorough and professional, with more than 2,500 statements taken and 3,700 exhibits recovered.”

Hilary Bradfield, the Crown Prosecution Service’s reviewing lawyer, said: “Mr George now has the right to be regarded as an innocent man, but that does not mean it was wrong to bring the case. Our test is whether there is sufficient evidence for a realistic prospect of conviction. It would be wrong to only bring cases where we were guaranteed a conviction.”

Previous claims

— The Birmingham Six, released in 1991 after 16 years in jail, were awarded £840,000 to £1.2m each

— The Guildford Four had their convictions quashed in 1989 after 15 years in prison. One, Paul Hill, received about £400,000

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