A Thai appeals court in August ordered the so-called "Merchant of Death" be handed over to Washington on terrorism charges, angering Russia, but the process has been held up by technicalities over the new accusations.

Thailand's Criminal Court, citing insufficient evidence, on Tuesday dismissed proceedings surrounding the new charges against Bout, who is said to have inspired the Hollywood film "Lord of War" starring Nicolas Cage.

"State prosecutors will not appeal and will work on the extradition process," said Sirisak Tiyapan, director of International Affairs at the Attorney General's Office.

Washington welcomed the ruling, saying it looked forward to a "speedy extradition".

"We look forward to having Viktor Bout in a prison near us very soon," State Department spokesman Philip Crowley told reporters.

But the long-running extradition battle may not be over yet because Bout's defence lawyer has said he plans a last-ditch legal challenge against the extradition order issued in August.

Bout, a 43-year-old former Soviet air force pilot, was arrested in 2008 after a sting operation in Bangkok involving undercover US agents posing as rebels from Colombia's FARC rebels, considered a terrorist group by Washington.

He has repeatedly denied suggestions that he was a former KGB agent and maintains that he ran a legitimate air cargo business.

Wearing a bullet-proof vest and shackles, he was escorted to court from a high-security Bangkok prison by a team of police commandos for a second straight day of hearings Tuesday.

The Russian appeared dejected as he left court, reiterating to reporters that he could not expect a fair trial in the United States.

His wife Alla Bout said the United States was trying to use her husband "as a scapegoat to undermine Russian influence".

"The United States wants to stage a big show trial and hang on him everything that they don't know who committed anywhere in the world."

He faces a maximum sentence of life in prison if convicted in the United States on charges including conspiracy to kill US nationals and providing material support or resources to a foreign terrorist organisation.

The case has put Thailand in a difficult diplomatic spot between key ally the United States and Russia, which has strongly opposed extradition.

A furious Moscow previously said the extradition attempt was politically motivated and vowed "to do everything necessary" to bring Bout home, sparking speculation that Bout may have knowledge of sensitive information.

The final decision on whether to send him to the US could rest with Thai Prime Minister Abhisit Vejjajiva.

"In accordance with the law, ultimately the executive has the power to decide, but I would rather wait for the court ruling," Abhisit told reporters last week.

A US indictment accuses Bout of using a fleet of cargo planes to transport weapons and military equipment to parts of the world including Africa, South America and the Middle East.

Washington, which has described Bout as "one of the world's most prolific arms traffickers," has lobbied hard for his extradition, and sent a private jet to pick him up in August that was left waiting on the tarmac.

Bout has maintained his innocence from the day he was detained in the Thai capital after allegedly agreeing to supply surface-to-air missiles in a series of covert meetings that also took him to Denmark and Romania.

US prosecutors claim he agreed to the sale with the understanding that the weapons were to be used to attack US helicopters.

earlier related report
Bout's extradition tug of war continues
Bangkok (UPI) Oct 5, 2010 - Suspected arms smuggler Viktor Bout will remain in Thailand, despite Washington's request for his extradition and also despite Moscow's vow to bring him home.

Bout, wanted in the United States for allegedly selling arms to Islamic militants as well as South American and African war lords, has been held in a Thai jail since 2008 when he was arrested in a joint U.S. and Thai police sting operation.

Bout was arrested at a Bangkok hotel on charges of offering to sell several hundred Russian MANPAD anti-aircraft weapons to FBI agents posing as members of the Colombian militant group FARC. Bout denies the charges.

If sent to the United States, he faces several terrorism charges and a possible life sentence in prison.

But legal wrangling over his fate has kept the former Soviet air force navigator and translator -- he is said to speak six languages -- in a maximum security prison in Bangkok.

It was to the prison, rather than the United States, that Bout was returned after a brief visit to Thailand's Criminal Court to hear the latest ruling on his future.

The senior court rejected an application by the prosecution to drop new charges against Bout, 43, delaying again a potential extradition to the United States.

Bout's lawyers appealed an earlier lower court extradition ruling and lost that appeal in August. But in the meantime Washington filed further charges against Bout concerning money laundering and wire fraud.

The Thai Criminal Court is keeping him in the Bangkok jail pending a ruling, likely this week, on the new charges.

Bout's lawyers are likely to appeal the coming ruling should it come down in favor of extradition. Even if they lose the final appeal, Bout's lawyers could make a personal appeal to Thai Prime Minister Abhisit Vejjajiva, who has the formal authority to make the final decision.

"In accordance with the law, ultimately the executive has the power to decide but I would rather wait for the court ruling," Abhisit said last week.

Bout, who appeared in the Criminal Court wearing a bullet-proof vest and surrounded by police commandos, told reporters that he wouldn't receive a fair trial in the United States should he be extradited.

At the same time that Washington is fighting for Bout's extradition, Russian Foreign Minister Sergei Lavrov has expressed full support for him. In August, Lavrov said the lower Thai court ruling that would have allowed his extradition was "unlawful and political" above all else.

"I assure you that we will continue to do everything necessary to push for his return to his homeland," Lavrov said.

Bout, a large mustachioed man born in Dushanbe, Tajikistan, was nicknamed "Merchant of Death" by a former British foreign office minister.

But Bout claims he is innocent and simply in the transport business, having run his own aviation company since leaving the Soviet military. With help from his family and his wife, Bout claims to have purchased four Antonov-8 cargo aircraft that became the core and starting point of his aircraft fleet.

On the so-called Official Web site of Viktor Bout, he is described as "a dynamic, charismatic, spontaneous, well-dressed, well-spoken and highly energetic person."

"He is a born salesman with undying love for aviation and an eternal drive to succeed," the site says.

The site also praises Google for refusing an order by the U.S. government to block access to Bout's Web site as part of Washington's "political conspiracy" against him.

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