CONVICTED Mafia boss Domenico Rancadore, from Uxbridge, will not be extradited back to Italy.
District judge Howard Riddle said a recent decision of the Administrative Court, which binds lower courts in England, had led to his decision.
Rancadore, known as Marc Skinner to friends and neighbours, will be bailed while an appeal takes place, the judge ruled.
He was told he must live at his home in Manor Waye and report to Uxbridge police station every day.
The 65-year-old was asked to secure his bail with £20,000. He will also be subject to a curfew and electronically tagged.
Rancadore was arrested at his house in August 2013.
Mr Riddle told the court his original decision was to extradite Rancadore.
In an original draft, Mr Riddle said he was satisfied the European arrest warrant was valid and that extradition was "compatible with the defendant's convention rights, including prison conditions".
However, in a dramatic turnaround, the judge changed his decision following the ruling in a similar case involving the Court of Florence.
"The judgment of the Administrative Court is binding on me," Mr Riddle said.
Rancadore's lawyer, Karen Todner, told the BBC: "It's almost impossible to defeat a European arrest warrant, but we have been successful today so I'm delighted with the decision."
Rancadore, who was known as The Professor in his native Sicily, moved to London in 1994 with his wife and two children.
He was found guilty of Mafia association and extortion in Italy in 1999 and given a seven-year jail term.
Rancadore adopted the alias Marc Skinner, using the maiden name of his British-born wife's mother.
Previously, the court heard he had fled Italy because he wanted a normal life for his family and had cut every tie to his past.
The prosecution alleged he had been deliberately absent from the 1999 trial, where he was subsequently sentenced, and had deliberately hidden his identity as he knew he was a wanted man.