A former Shropshire barman given a life sentence after conning victims out of more than #1 million could be released by the end of the year following an Appeal Court ruling yesterday.

The court quashed fraudster Robert Hendy-Freegard's conviction for two offences of "kidnapping by fraud", relating to allegations that two of his victims were effectively deprived of their liberty.

The 36-year-old, dubbed the "puppetmaster", allegedly posed as an MI5 agent and commandeered the lives of a string of victims, including several Midland students, during a decade-long charade that began when he worked as a barman at the Swan pub in Newport.

He was given a life sentence in September 2005 after a trial at Blackfriars Crown Court in London and told he would not be considered for parole until March 2013, after Judge Deva Pillay described him as an "egotistical confidence trickster".

This week his lawyers argued at the Appeal Court in London that a fundamental flaw in the trial was the absence of evidence of false imprisonment.

According to his counsel, Tim Owen QC, the offence of kidnapping required, in law, deprivation of a victim's liberty and free will - and there was no evidence of this in the case.

His legal team said the trial judge had failed to instruct the jury that this was an essential ingredient of kidnapping.

Although Hendy-Freegard, of High Street, Blyth in Nottinghamshire, pretended to be an officer, he did not purport to arrest anyone, the court was told.

His life sentence was set aside yesterday but he was told he would still have to serve the remainder of a nine-year jail term passed in September 2005 for 18 offences of fraud and theft.

This means he should be released by the end of this year, taking into account remission and time spent in custody from the time of his arrest in May 2003.

The appeal judges - Lord Phillips, the Lord Chief Justice, sitting with Mr Justice Burton and Mr Justice Stanley Burnton - will give reasons at a later date for their decision to quash the kidnap convictions and dismiss Hendy-Freegard's appeal against the nine-year sentence.

The alleged fraud began at the Swan pub when he befriended a number of students from Harper Adams Agricultural College in Newport and, following the suicide of an Irish student, began to pretend he was a policeman or agent sent to investigate an IRA cell at the college.

His victims were forced to carry out bizarre "missions" and feared his explosive temper and his claims that IRA assassins were stalking their every move.

Among his eight victims was student John Atkinson, who handed over more than #300,000 to pay for so-called "protection" from IRA terrorists.

Fellow student Sarah Smith was left nearly #200,000 poorer after emptying her trust fund, taking out loans and begging from her parents and others to provide funds to buy "police protection".

The two were said to be so traumatised that they contemplated suicide.