Two men convicted of murder in 1980 have been cleared on appeal.

The judges said the evidence against Terry Pinfold, from Hornchurch, Essex, and Harry Mackenney, from Dagenham, Essex, was "so unreliable that it is worthless".

The businessmen were jailed for life 23 years ago after being implicated in a string of murders by a former employee, Bruce Childs, who had confessed to a series of contract killings.

On Monday, the Court of Appeal in London quashed as "unsafe" the convictions of businessmen Mr Pinfold and Mr Mackenney.

'Not capable of belief'

Lord Woolf, the Lord Chief Justice, said fresh evidence showed Childs - regarded as an unsatisfactory witness even at the trial - was a "pathological liar".

The judge, sitting with Mr Justice Aikens and Mr Justice Davis, said they were "unable to say where the truth lies as to these terrible murders".

But the evidence of Childs, although corroborated to some extent, was "not capable of belief".

The ruling had been predicted when the pair, both now 70, were released on bail following the hearing of their appeals in October.

In the 1970s, ex-prisoners Mr Pinfold and Mr Mackenney were in business together making underwater diving equipment.

Convicted of four murders

One weekend in November 1974, another former inmate, toy maker Terry Eve, who shared their factory space in Dagenham, disappeared.

It was not until four years later that Childs implicated his former employers in his crimes.

As a result, Mr Mackenney was convicted of four murders, including those of haulage contractor George Brett and his 10-year-old son, Terry.

He was acquitted of murdering Terry Eve because of lack of corroboration, but Mr Pinfold was convicted of murdering Mr Eve on the basis that he procured Mr Mackenney and Childs to kill him.

Mr Mackenney was given a "whole life" tariff and faced the prospect of never being released from prison.

Childs still in prison

Mr Pinfold was first bailed, pending appeal, in September 2001 having served almost all of his recommended minimum sentence.

The pair's initial appeals had failed, but many years later the case was referred back to the Court of Appeal by the Criminal Cases Review Commission, which investigates possible miscarriages of justice.

Childs is still serving a life sentence for six murders.

None of the bodies has ever been found.

Childs claimed he had dismembered them and burned them on his domestic grate.

It was 23 years ago but if he closes his eyes, Terry Pinfold can still hear the austere tones of Mr Justice May, calling him a callous liar and jailing him for life at the Old Bailey.

He has protested his innocence since a jury found him guilty of procuring the murder of a business associate.

Pinfold is 70 and although he has lost his health, wealth and marriage, this week represents the best chance he has to clear his name.

Tomorrow, following an intervention by the Criminal Cases Review Commission, his case will be heard again by the court of appeal.

Campaigners are convinced that having spent so many years behind bars on a charge he always denied, he will prevail.

He doesn't pretend to have been a model citizen, but preparing for the case at his flat in Essex, surrounded by books and legal statements, Pinfold says some form of redemption is overdue.

"I have been out on bail waiting for this for two years. I could have been released sooner but they wanted me to admit to something I didn't do and I would not do that," he says. "I am old and sick now but if we get the right result, I will be able to settle down with my children and try to make up for lost time."

From 1970, when he was released from jail having served a sentence for armed robbery, Pinfold seems to have been swept along by events beyond his control. He set up a business making diving equipment with Harry Mackenny, whom he met in prison. When John "Bruce" Childs, another inmate, was released Pinfold gave him a job. Another inmate, Terry Eve, was given factory space to manufacture teddy bears.

In November 1974, Eve went missing. Pinfold was interviewed by police and told them he had last seen Eve loading teddies into a van just as he was leaving London with his family to spend the week end with in-laws in Clacton.

He heard nothing for two years but then the sky fell in. In 1976, he was charged with two armed robberies. Despite pleading not guilty he was sentenced to 10 years in jail. The appeal court cleared him of the main charges in 1979.

But even as he protested his innocence of the remaining charges, things took a dramatic turn for the worse.

In 1980 his old friend Childs pleaded guilty to six murders and implicated Pinfold in four. He told police that he, Pinfold and Mackenny were involved in contract killings in which Pinfold would seek out the work and he and Mackenny would commit the murders. No victims' bodies or weapons were found. Pinfold was convicted largely on Childs' evidence.

Childs was an unimpressive witness but Mr Justice May also cast doubt on Pinfold's protestations that he was in Clacton at the time Eve disappeared and the jury took those doubts to heart.

Pinfold's position was strange from the outset. The court concluded that he ordered Mackenny to murder Eve. But Mackenny was cleared of murder. Other revelations about Childs have also emerged.

He is now known to have written a series of letters about the case, changing his account each time. In one, written before Pinfold submitted his first appeal, Childs said his wife and not Pinfold asked him to kill Eve because the victim had sexually assaulted her. That letter was never disclosed.

There is also doubt about whether Eve was ever murdered. Pinfold's lawyers will claim the police investigation was called off when Scotland Yard commander Bert Wickstead told his men that Eve was alive and living in west London under an alias.

Danny Simpson, Pinfold's lawyer, said Childs' unreliability was now beyond doubt. "I am only sorry it has taken 22 years to prove it. Terry Pinfold went into prison a fit and healthy man. He has missed the prime of his life," he said.

If he loses the appeal Pinfold has four years to serve. "If people had done their jobs properly, I would never have been in this situation," he said. "I just have to trust the system now, and hope it works."

Terry Pinfold is the first to admit that he has been a bit of a rogue in his time: knock-off goods, stolen cars; he was even caught nicking clocks out of a shop window when he was a kid and sent to reform school. But a killer? You've got to be joking, he says. And that's why he's an angry man.

Pinfold, 70, has spent a quarter of a century in prison ticking off the empty days, convicted of procuring a murder he has always claimed he had nothing to do with. He is currently out on bail and this week should hear at the appeal court whether his conviction has been overturned. Of course, he'll be relieved if it is, but he's in no mood to celebrate, nor is he in the mood to forgive. In the time he has been jailed, he has lost his wife, his health, his house, his wealth. Everything. Except his pride.

We first meet on a cold, bright February day. He is driving me in his 13-year-old Audi, via the fish and chip shop, to his council flat in Essex. "How much d'you reckon this cost me?" he says. He often asks how much I think things cost. "Seven hundred quid!" He laughs. He's proud of his ability to spot a bargain. But since he came out of prison he has had to have a keen eye for a bargain. He was released with £47 to his name.

Until recently, Pinfold was a big, broad man. Not one you would mess with. At 5ft 10in and 16 stone, he was probably a bit too big, truth be known. But when he became sick in prison he lost almost seven stone, and became a shadow of his former self. He still looks gaunt, but he is back up to 11 stone. Since being jailed he has suffered six strokes, angina, diabetes and, worst of all, he says, colitis. He tells me how how he was refused hospital treatment on three occasions because of a lack of staff and transport. He was only diagnosed as having colitis after an emergency operation in which most of his large bowel was removed. He believes the prison service is responsible, and intends to sue the Home Office for negligence, but first there is the small matter of clearing his name.

Back in 1970, Pinfold had just come out of jail after serving a sentence for robbery. He had a wife and kids, and had always fancied running a business. He became partners with Harry Mackenney, whom he had met in prison, and set up a factory that made underwater diving equipment. For the next few years everything went fine. He was making money and keeping out of trouble. But he never managed to escape his past. Not only was he working with Mackenney; he was also in touch with prisoners still serving time. Pinfold had always been a popular man, both in and out of jail. Ah, Terry, they said, he'll do anything for anyone. And that was the problem.

When Bruce Childs, who had been in prison for stealing motorbikes, was released, Pinfold found him a room in a house and gave him a job at the factory in Dagenham. "He was a good worker, he was. A good worker," Pinfold recalls. He also helped out another man - Terry Eve, a former prisoner who hadn't served time with him, but who was looking for workspace to manufacture teddy bears. Pinfold obliged.

One weekend in November 1974, Eve went missing. Naturally, the police interviewed Pinfold as part of their investigation. He told them that the last time he had seen Eve was on the Friday night when Eve was loading Pinfold's van with teddies to deliver. Pinfold was with his wife and children, and they were preparing to visit his in-laws in Clacton-on-Sea, 65 miles away, where they spent the weekend. And that was the last he saw of the police for a couple of years.

But in December 1976, Pinfold was charged with two armed robberies at banks in Essex. The charges piled up - 10 in all, including supplying guns and stealing a car used in one of the robberies. He pleaded not guilty and insisted he had nothing to do with the robberies. In the end, he was cleared of half the charges but went down for 10 years for the robberies and car theft. His lawyer told him he was lucky to get off so lightly. "Lucky? I said to him. Getting 10 years for doing nothing?"

Meanwhile, the police were still investigating the disappearance of Eve. Pinfold was visited by two officers while at Brixton prison in January 1977. Again he told them he knew nothing about Eve's disappearance, that he had spent the weekend at his in-laws.

In 1979, Pinfold received good news - two men admitted to the armed robberies and said Pinfold had had nothing to do with them. At the appeal court in November he was cleared of all the remaining charges except one - stealing the car. But he was still confident he would get the final conviction overturned when, a month later, his world fell apart.

Childs pleaded guilty to six murders committed between November 1974 and October 1978, and turning Queen's evidence, implicated Pinfold in four of them. He said the first three killings had taken place at Pinfold's factory in Dagenham. First, he said, Pinfold had asked him and Mackenney to kill Eve. This, he said, was carried out so seamlessly that they set up as contract killers, with Mackenney and he carrying out the killings and Pinfold "winning" the contracts. Next, Childs said, they killed haulage contractor George Brett and his 10-year-old son Terry, purely for financial gain. Finally, he said, in November 1975, the trio murdered Ron Brown, another of Pinfold's employees, because Brown had witnessed the killing of Eve. The tale seemed to be as unlikely as it was macabre. None of the bodies had ever been discovered. Childs said this was because he had dismembered them and burned them in his grate.

In October 1980, Mackenney was sent to trial for six murders and Pinfold for four. There were no forensics; just Childs' evidence. Newspaper reports say Childs cut a pathetic figure in court - a friendless petty criminal who collected weapons and war books, boasted to other prisoners of his killings and pulled out his own toenails to make himself look tough.

In his summing up Mr Justice May warned that Childs could not be regarded as a reliable witness because he had told so many contradictory stories. Nevertheless, Mackenney (who is also appealing against his convictions) was convicted of four murders and Pinfold was convicted of procuring the murder of Eve - but acquitted of the other charges.

The story gets stranger. While Pinfold was found guilty of instructing Mackenney to murder Eve, Mackenney himself was acquitted of the murder, because there was no corroborating evidence. Yet Mr Justice May directed the jury to note corroborating evidence of Pinfold's involvement that was ambiguous at best. Pinfold has been protesting his innocence ever since, and in 1981 had an appeal turned down. If he had admitted his guilt, he could have been released 10 years ago.

Pinfold has gone into his tiny kitchen to serve the fish and chips. The living room is crammed with bits and pieces - old tellies, Jubilee mugs, framed pictures of birds, an ancient organ. It looks like a car boot sale.

He returns with the food and a dense file with every piece of paper that documents his case: press cuttings; a summary of his case from the Lifer Review Board, which acknowledges that he has been a model prisoner; various witness statements; and most astonishingly, an affidavit, written by Childs in 1986, in which he says that he made up the story about Pinfold's involvement.

"The evidence I gave against Mr Pinfold was untrue," it reads. "I do not, nor have I known of, any matters or circumstances which link Mr Terence Pinfold with the death of Mr Terence Eve ... the police officers investigating the case wanted additional names and they had questioned me as to my knowledge of Mr Terence Pinfold ... I subsequently gave evidence against Mr Pinfold at his trial because of the inducement that my 'cooperation' at the trial would ensure my early release from prison.

"Mr Terence Pinfold is innocent of the murder of Mr Terence Eve and he was only convicted because of my perjured evidence, and I am willing to testify in any court to that effect."

The affidavit is sworn at HM Prison, Romsey Road, Winchester and dated July 1986, six years after Pinfold was convicted. I read it in shock. "There's worse yet," Pinfold says. Childs never got the chance to testify to his perjury because when Pinfold applied to the court of appeal in 1988 it refused to hear the case on the grounds that he had earlier had an appeal dismissed (albeit on different grounds). Repeated requests to the Home Office were refused. It was only when the power of referral passed to the newly formed Criminal Cases Review in Commission in 1995 that he got another chance - and still it has taken eight years for his case to reach the appeal court.

Childs first offered to give evidence that would "explode the prosecution" at Pinfold's first appeal in 1981, in exchange for a £50,000 donation to the Brett family. Not surprisingly, his conditions were not met, and he didn't give evidence. Since then he has retracted his evidence many times. But in the late 90s, when interviewed by the CCRC, this pathological liar retracted his retraction.

Whatever, Pinfold says, he should never have had to rely on Childs. He is convinced he was only convicted because of the way the judge directed the jury - indeed, this was part of the basis for the first appeal. "The judge said that because Childs was unreliable, they had to look for corroborating evidence. D'you know what they used? My alibi." He almost spits out a chip in disgust. "My father-in-law told the court that my car hadn't moved from his drive in Clacton all weekend because we'd been with them. They used that against me! The judge said it was too neat, too pat."

Mr Justice May was unimpressed with the way Pinfold's father-in-law, who was deaf, gave his evidence, and suggested the alibi might be fabricated. "What the judge didn't realise was that there was a good reason for my father-in-law to remember that the car hadn't left the drive. He wouldn't drive with me. We went out once, and he shit himself. He said, 'I'll never drive with you again,' and he didn't. Whenever we went to Clacton our car was parked in the driveway, and anywhere we went he drove."

The judge also told the jury there was something else they could view as corroborating evidence - the fact that Pinfold had not paid Eve's family compensation for his share in the business. "But that's the point," Pinfold says. "There was no need for me to pay compensation. It was my company, and he worked for me." But the prosecution presented Eve as Pinfold's partner and argued that he did have a motive for murder - he wanted sole control of the company.

At court, the jury heard Childs give evidence against Pinfold, explaining how Eve was killed at the factory on the Saturday and Pinfold helped them clean up the blood by sluicing the walls with sulphuric acid. Childs said none of the women who worked there came to the factory that day. But Eve's wife, Jean, and his mother, Anne, both said they had gone into the factory on the Saturday morning, and another worker, Mary Myers, said she had been there all morning and there was no trace of a murder, or of Pinfold. The jury chose to override the inconsistencies.

Even more important, Pinfold says, is the fact that the police officers who had interviewed him days after Eve disappeared, and the officers who had interviewed him two years later in prison, never gave evidence in court. "They were the first people who asked me about Terry's disappearance, long before 1979, yet I couldn't get hold of them. I wrote to all the police stations and couldn't find out who interviewed me. I was told it was too far back for there to be records."

He kept digging, wrote letter after letter to the authorities. Eventually, in 1983, the Home Office confirmed that he had been interviewed at Brixton prison in 1976 and gave him the names of the officers - Cade and Griffiths. Then, in 1987, 13 years after the event, he received confirmation that the police had interviewed him, days after Eve's disappearance, though they had no record of what he had said. "The evidence of those interviews was withheld, and if you withhold vital alibi evidence that should get your conviction quashed." Indeed, this could be what clinches it for Pinfold in the appeal court. But, he says, it is of little comfort to him, 24 years too late.

In 1990, he says, he hit a low. On September 1, his wife asked for a divorce. On September 2 his brother died. He asks if I'd like to see some old photographs. He takes out pictures of himself as a young army man - straightbacked, proud and handsome. "That was me," he says. "Best time of my life. 1950-55, I was a gunner in an anti-tank platoon. Ended up a sergeant." He points me to his bedroom, where his uniform hangs up, spotless. Yes, he says, he had made mistakes early on in life, but the army convinced him he could make something of himself. And for a couple of years he held down a decent job working on the lead presses in a foundry. Then it all went wrong.

In 1957, he was badly concussed in a car crash. (In fact, it was only seven years ago, when he had an X-ray of his head, that he discovered he had fractured his skull at the time.) He was on sick leave for nearly a year, and in that time met up with old schoolfriends who reacquainted him with petty crime. In May 1958, he was sentenced to two years for stealing a lorryload of cigarettes.

"You start getting an education in prison. So within four months off coming out, I was back inside doing another two-year stretch, and it went from there. I done a two and a two and a three." In 1970, he was released, and was determined to go straight. And, he says, despite what his records show, he managed to.

It's June, and we meet up again at his flat. His appeal is drawing nearer, and he knows that if he loses it he will end up back in jail serving the remainder of his sentence. The same evidence that could have won him his freedom 17 years ago, when Childs signed the affidavit proclaiming Pinfold's innocence, will be heard in the appeal court.

Pinfold, who was famous for his cooking in prison, is making rabbit stew. "Look, I was always a straight-up, straight-down kind of fella," he says. He takes a letter from the file, which he wrote to the prison telling them they had undercharged him £17 for food, and another to the authorities saying he had been charged for a television he didn't have. "Does it show my character? I think I'm fair-minded. I don't want other people's money. I want what's mine. I don't want 17 quid extra, because someone is going to lose because I've gained."

The rabbit is tender, the vegetables firm, the gravy perfect. He explains how he's produced the meal for next to nothing. "Guess what a tin of tomatoes cost me?" he asks. "Nine pence a tin."

Pinfold tells me about cooking in prison. "Even the screws liked my cakes. One of the screws said, 'I'm gonna get rid of my wife and marry you.' Fuckin' cheek." He waves his fork in the air. "Would you believe I don't like this? Do you know why? Because since that operation I can't taste properly. I loved my food, used to absolutely love it, and now I can't taste it. It's horrible."

As the decades have passed, more inconsistencies have emerged. "Did you know that Childs said I introduced him to murder? Me! Now he says he's killed another four people before he met me. He's just a liar, a fantasist."

It's July, and Pinfold's solicitor, Danny Simpson, has just told him he has uncovered three vital bits of information that were withheld from his trial. First, Eve's wife acknowledged in a statement that Pinfold was away for the weekend her husband went missing; second, Eve's sister and her husband also said he was away for the weekend, and specified he was at his father-in-law's house in Clacton; third, the investigation into Eve's death, carried out by police officers Cade and Griffiths, was apparently called off in 1977 when their boss, Scotland Yard's Commander Bert Wickstead, told them he had information that Eve was living in west London under an alias - three years after he was supposedly murdered. "It's unbelievable, isn't it? These facts alone should have cleared my name at my trial."

I ask him if he feels bitter. Yes, he says, of course he does, and the best he can hope for now is compensation so that he has a legacy for his children. Is he worried that he may lose the appeal - he still has four years of his sentence left. "Yes, I have thought about it," he says. "I'd carry on fighting till I'm cleared. I'm strong. People have said to me, at worst you'll get out on medical grounds. And I've said, hold on, under no circumstances will they use my medical condition. I will refuse medical grounds. If I don't get cleared because I'm innocent, I'm going back to jail."

When John Childs, one of the most notorious of post-war murderers, confessed last year that he had committed other murders for which he had not been convicted, the confession was of particular interest to one man starting the 21st year of his sentence for murder at Swaleside prison in Kent.

Terence Pinfold says he is there because Childs wrongly implicated him in the murder of a business colleague for which they were both convicted. He hopes his latest confessions will indicate he is a liar and his evidence against him, Pinfold, should be dismissed.

Pinfold, aged 66, met Childs in prison when they were both young men. They met again when both were free in the mid-70s. By this time Pinfold had a small factory in Dagenham, Essex, which he shared with a man called Terence 'Teddy Bear' Eve, manufacturing lifejackets and teddy bears. Eve disappeared in November 1974.

Five years later when Childs was arrested for an unconnected robbery, he confessed to killing him, and went on to admit another five killings.

In his confession, Childs implicated Pinfold, claiming that his friend had asked him to kill Eve so he could take over their business.

He also suggested that Pinfold had acted as an agent for Childs's contract killing business, finding clients who wanted someone disposed of and then handing the job to Childs.

Childs gave evidence against Pinfold at the Old Bailey in 1980. Pinfold was convicted of soliciting the murder of Eve and jailed for life.

'I still have no idea why he did it,' said Pinfold this week of Childs's statement about him when asked why Childs should implicate a man who had done him no harm. Pinfold's daughter Tina said that in a letter to her father offering to help in 1986, Childs had explained that 'it was you or my kids' and indicated that he had had to do a deal in which Pinfold was implicated, fearing that if he did not implicate Pinfold a member of his own family would be charged in connection with one of the murders.

He offered his apologies to Pinfold for 'smashing your life'.

Childs offered to sign an affidavit saying he had made up his evidence. In the affidavit, he duly wrote: 'He [Pinfold] was only convicted because of my perjured evidence and I am willing to testify in court to that effect.'

'With Childs's latest confessions it would seem like the right time to ask just why I am in prison,' said Pinfold.

Danny Simpson, Pinfold's lawyer, said: 'The Home Office told us they could not reopen the case on the basis of the fresh evidence of Childs because he was an unreliable witness, but Terry Pinfold has spent more than 20 years in jail on that very evidence.'