Wrongly convicted prisoners will no longer have to pay for their bed and board in a victory for an innocent man who served 17 years for a rape he did not commit.

Andrew Malkinson served almost two decades in jail for a rape that the court of appeal last month ruled he did not commit.

But once he was declared a free man, Mr Malkinson was told that he would need to repay costs incurred during his 17-year prison stay.

Alex Chalk, the Justice Secretary, is to scrap the requirement for prisoners who have been victims of miscarriages of justice to pay for “saved living expenses” out of any compensation they receive from the state.

Mr Malkinson continuously maintained his innocence and was declared a free man after his conviction was overturned by appeal court judges after DNA and other evidence proved he could not have been responsible for the rape.

While he would not have had to reimburse the prison service directly if he won compensation, the existing rules meant Mr Malkinson’s payment could be docked to account for costs he would have incurred on the outside, such as food and accommodation expenses.

This element of the guidance was added in 2006 and will be removed with immediate effect, applying to all future payments made under the miscarriage of justice compensation scheme including that of Mr Malkinson.

Mr Chalk, KC, a leading criminal barrister, said: “Fairness is a core pillar of our justice system and it is not right that victims of devastating miscarriages of justice can have deductions made for saved living expenses. This common sense change will ensure victims do not face paying twice for crimes they did not commit.”

The miscarriage of justice compensation scheme is designed to help individuals restart and rebuild their lives. It is just one route in which an individual can receive compensation for a wrongful conviction, with other options including suing public bodies.

In Mr Malkinson’s case, it would be Greater Manchester Police whose flawed investigation led to his conviction and imprisonment 17 years ago.

To be eligible for a payment under the scheme former prisoners must apply within two years of being pardoned or having their conviction reversed as a result of a newly discovered fact which demonstrates “beyond reasonable doubt” they did not commit the offence.

The maximum amount of compensation payable under the scheme is £1 million for 10 or more years imprisonment or £500,000 for up to 10 years.

Last week Downing Street made clear that Rishi Sunak, the Prime Minister, felt the deduction was unfair.

“In principle for someone who was wrongly convicted, I don’t think the Prime Minister thinks it would be fair for them to have to repay costs because they have wrongfully been kept in prison for something that they didn’t do,” said his spokesman.

Former home secretary Dame Priti Patel, former justice secretary Sir Robert Buckland, former attorney general Dominic Grieve and Sir Bob Neill, chair of the justice committee, also called for reform of this aspect of the legislation.

Mr Malkinson urged the Government to go further with additional measures for victims of miscarriages of justice.