A double murderer who took a prison officer hostage and demanded the release of hate preacher Abu Qatada has been awarded a £240k taxpayer-funded payout.

Fuad Awale was transferred to a special separation unit for dangerous convicts after he and another convict ambushed a jail worker and threatened to kill him.

Awale used Article 8 of the European Convention of Human Rights (ECHR) to claim his segregation - designed to prevent him harming officers and radicalising inmates - had breached his right to life.

David Lammy, the Justice Secretary, has now agreed to pay £7,500 compensation and £234,000 legal costs after the convicted killer stated he had suffered 'severe depression'.

The court heard Awale previously asked to associate with one of the Islamic extremist killers of Fusilier Lee Rigby - but was denied the request due to 'counter-terrorism concerns'.

He and an accomplice also demanded the release of Qatada, a hate preacher who had been facing deportation to Jordan to face terror charges, as well as Roshonara Choudhry, who stabbed Labour MP Stephen Timms in 2010.

The High Court has ruled in favour of Awale's appeal to the ECHR, with a judge saying there had been a 'significant degree of interference with the claimant's private life', The Telegraph reports.

The judge added: 'The degree of interference with the claimant's private life which has resulted from his removal from association has been of some significance and duration.'

Fuad Awale was transferred to a special separation unit for dangerous convicts after he and another convict ambushed a jail worker and threatened to kill him

Mohammed Abdi Farah and Amin Ahmed Ismail (pictured) were shot and killed by Fuad Awale in 2011

The double murderer, who took a prison officer hostage and demanded the release of hate preacher Abu Qatada (pictured), has been awarded a £240k taxpayer-funded payout

Robert Jenrick, Conservative shadow justice secretary, has branded the decision a 'sick joke'.

He said: 'Labour are cowing to terrorists and the human rights brigade. They must introduce emergency legislation to carve these monsters out of the ECHR immediately. If they don't, we will as soon as Parliament returns.'

Mr Lammy, who revealed the payout to Awale in a letter today, suggested ministers were considering changes in the law to prevent extremist criminals from using the ECHR as a 'barrier to us protecting national security'.

Awale was sentenced to a minimum of 38 years in prison in January 2013 aged 25 after shooting Mohammed Abdi Farah, 19, and Amin Ahmed Ismail, 18, in the head in a Milton Keynes alleyway over a drugs dispute.