Nadir faces 66 counts of theft following an alleged fraud to the tune of £34m.

In 1993 he fled to northern Cyprus, which has no extradition treaty with the UK.

Old Bailey judge Mr Justice Bean said he hoped the bail offer would end the "legal limbo" which has existed ever since.

He also quashed an arrest warrant for the 69-year-old but imposed 10 conditions on bail.

These include a requirement for Nadir to be at the Old Bailey for a hearing on September 3.

The Conservative Party donor fled Britain after his Polly Peck business empire collapsed.

Mr Justice Bean said: "Mr Nadir... should be given the opportunity to submit to the jurisdiction of this court by attending in person."

The conditions include depositing £250,000 with the court as a security before returning, giving notice of his flight, submitting to electronic tagging, surrendering travel documents and being at court on September 3.

Nadir will have to apply for a British passport before he can travel, the court heard.

The judge said Nadir probably thought he was breaching his bail conditions when he left the UK - but it turned out he was not.

He added: "As it happens, and more by luck than Mr Nadir's judgment, there is today no warrant for his arrest."

If Nadir did not turn up, a legal warrant could now be issued which could be enforced outside Northern Cyprus.

On his return, Nadir would be met by Serious Fraud Office investigators at the airport.

The court hearing in September is likely to be a formality to fix the date of a long trial next year.

A spokesman for Nadir said: "Mr Asil Nadir is extremely satisfied with the outcome of today's hearing and looks forward to attending the Old Bailey on Sept 3 and beginning the process of clearing his name and proving his innocence."