Josef Fritzl, who fathered seven children with his daughter while keeping her locked in a dungeon as a sex slave for 24 years, will plead insanity to avoid a prison sentence.

Lawyers for Mr Fritzl, 73, will argue that he was not responsible for his actions and will try to acquire a certificate of insanity.

Rudolf Mayer, a prominent Viennese lawyer who represents Mr Fritzl, said: “In my opinion, Josef Fritzl is mentally ill and therefore not responsible for his actions. I believe that my client does not belong in a prison but rather in a closed psychiatric ward.”

A forensic psychiatrist has been appointed by the St Pölten court, where Mr Fritzl will stand trial, to assess his mental health and determine whether he was responsible for his actions when he imprisoned his daughter Elisabeth, now 42.

Mr Mayer said that he was convinced that his client was “mentally incompetent” and that he would challenge any other decisions by the court psychiatrist and demand another expert opinion from a psychiatrist of his choice – a right granted to him by Austrian law.

He said: “If I feel that the expert opinion does not correctly portray the personality of my client, I will order another expert examination.”

Mr Mayer also complained that he is receiving hate mail and telephone threats because of his decision to defend Mr Fritzl. He said: “I am getting letters saying I should be locked up together with Fritzl. But I am not representing a monster; I am representing a human being. As I first saw him, the Latin term pater familias came to mind. It was used to describe the absolute head of the family – caring, but strict. Nowadays people would call that a patriarch.”

Officials of the police archives in Linz, Upper Austria, have found files from the Sixties showing that Mr Fritzl was a known sex offender. He served 18 months in jail for raping a 24-year-old woman in 1967. His record also shows that he was convicted of attempted rape and arrested for indecent exposure.

Meanwhile, it emerged that Mr Fritzl, a retired engineer and real estate developer who was juggling numerous property deals, was financially ruined, with debts of millions of pounds.

It also emerged that Mr Fritzl’s wife, Rosemarie, and Elisabeth and her six children could end up homeless as there is a mortgage on the Fritzl family house in Amstetten. Mr Fritzl lived in the house with his wife and three of his children by Elisabeth – Lisa, 15, Monika, 14 and Alexander, 12 – while the other three children, Kerstin, 19, Stefan, 18, and Felix, 5, were forced to stay in the cellar with their mother.

A local bank has requested the immediate return of a loan of more than €1 million (£780,000) that Mr Fritzl took out for property investments. In addition, authorities investigating his financial affairs have found mortgages amounting to €2.2 million.

On top of the horrors of abuse, deprivation and their humiliation in the local media, where they are known as the Incest Family, the Fritzls are now facing financial ruin because of Mr Fritzl’s debts – and the costs of long-term therapy, which could exceed €1 million. Local charities are setting up funds to support the family, while authorities are looking for legal mechanisms to provide financial aid.

In a separate development, more chilling details about the family’s life underground have been revealed by investigators. Colonel Franz Polzer reported that Elisabeth, Kerstin and Stefan were kept in a single narrow room designed to be a nuclear shelter from 1984 until their father started expanding their prison in 1993.

Colonel Polzer said: “She [Elisabeth] said that there was only one single room at first. The dungeon was expanded as the children were getting born.” In the first nine months of her captivity, Elisabeth was kept tethered on an extended cable, resembling a dog leash, which allowed her to reach the lavatory but otherwise restricted her movement.

The life in the narrow concrete cube also meant that the children would witness how Fritzl would sexually abuse their mother. The children are now being treated in a local clinic together with their mother and grandmother.

Doctors have installed an aquarium with goldfish for Stefan, 18, who is having difficulties speaking and moving in open space after years of captivity. They have also brought teddy bears for Felix, who is seen as having the best chance of recovering from the ordeal.

Authorities have stepped up security around the Amstetten-Mauer clinic, where the family are being treated, after several violent incidents involving reporters attempting to enter the premises. One reportedly dressed as a police officer and tried to walk in at the front door. The Austrian Cobra antiterrorism unit has now been deployed to secure the hospital.

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