The innocent man who was wrongly jailed 17 years for a rape he did not commit will not have to pay living costs covering his time in prison following a dramatic intervention by Rishi Sunak’s Government.

Justice Secretary Alex Chalk KC made the change covering wrongly convicted people with immediate effect on Sunday after the miscarriage of justice case of Andrew Malkinson sparked outrage.

Mr Malkinson spent 17 years in prison for a rape he did not commit, and appeal judges quashed his conviction last week after DNA linking another man to the crime was produced.

The 57-year-old expressed concern that the rules meant expenses could be deducted from any compensation payment he may be awarded to cover the costs of his jail term.

Downing Street indicated that the Prime Minister believed the deductions were unfair amid demands to drop the charges.

Mr Chalk has now updated the guidance dating back to 2006 to remove them from future payments made under the miscarriage of justice compensation scheme. The reform to eligible cases was broadly welcomed, but there were calls to pay back the money already deducted from wrongly convicted individuals.

Andrew Malkinson, who served 17 years in prison for a rape he did not commit, outside the Royal Courts of Justice in London

Andrew Malkinson arrives at the Royal Courts of Justice in London, ahead of his hearing at the Court of Appeal over his 2003 rape conviction

The Justice Secretary 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.’

Sir Bob Neill, the Tory MP who chairs the Commons Justice Committee, said he was ‘delighted’ that Mr Chalk has ‘moved so swiftly on this’.

‘Big credit to Andrew Malkinson, his family and supporters,’ Sir Bob told the PA news agency.

But he suggested ministers should go further and make payments to miscarriage of justice victims who have already had their compensation docked.

‘I wonder if the Government could consider ex-gratia payments on a case-by-case basis to make up for that if people can demonstrate they fulfil all the criteria,’ the MP said.

Liberal Democrat justice spokesman Alistair Carmichael echoed the sentiment.

‘To take someone’s liberty wrongfully and then charge them for prison living costs reads like some kind of sick joke,’ he said.

Secretary of State for Justice Alex Chalk made the change covering wrongly convicted people with immediate effect on Sunday

‘The Government must now review past cases where people have been forced to pay for saved living expenses after being wrongfully convicted with the view to compensate these individuals fully.’

In order to be eligible for a payment, people must apply for compensation within two years of being pardoned or having their convictions reversed.

The reversal must be on the basis of a new fact that demonstrates ‘beyond reasonable doubt’ they did not commit the offence and they must not be responsible for the non-disclosure of the evidence.

The maximum payments under the miscarriage of justice compensation scheme is £1 million for more than 10 years’ imprisonment.

Independent assessors could make deductions based on ‘saved living expenses’ such as rent or mortgage payments.

But the Ministry of Justice said the independent assessor has not done this in the last 10 years.