Counsel for the former IRA prisoner Angelo Fusco, who was arrested on Monday night on foot of an 18-month-old warrant, will ask the High Court to release him tomorrow on the grounds of "profound" changes brought about by the Belfast Agreement.
They will contend he could have been arrested months ago on foot of the 1998 warrant.
Fusco (43), from west Belfast, has served more than 10 years in Portlaoise Prison and fought a six-year battle against extradition. Garda sources said he was not suspected of having links with dissident republicans and is known to support Sinn Fein on the peace process.
The dissident Ulster Unionist MP, Mr Jeffrey Donaldson, said the Republic must hand Fusco over.
If he Fusco is returned to British jurisdiction, he could get temporary parole from the Maze Prison - now almost empty due to the early prisoner release programme of the Belfast Agreement. He could be free within weeks. If returned to custody here he is likely to be freed on bail.
However, the matter is now before the courts and there will be no intervention by either government until the judiciary decides on the case. Tomorrow's application to the High Court to effectively overturn a Supreme Court decision is unprecedented.
The Supreme Court directed in February 1998 that Fusco be extradited to Northern Ireland to finish a life sentence - with a recommendation that he spend at least 30 years in prison - for murdering a British soldier in 1980.
Fusco and seven other IRA prisoners escaped in June 1981, on the day the sentence was passed down. Gardai caught him the following year and he served almost 10 years in Portlaoise.
Fusco was arrested by gardai at a routine traffic checkpoint outside Castleisland, Co Kerry, on Monday night. Local Garda sources said he gave a false name and address, but a garda recognised him.
He was held at Tralee Garda station and brought under armed guard to the Bridewell in Dublin yesterday. Last night he was transferred from Mountjoy to Castlerea prison in Co Roscommon where the remaining few Provisional IRA prisoners are still held.
When it appeared he might be taken directly from Tralee to Northern Ireland yesterday, lawyers made an application to the High Court on his behalf. Mr Justice Finnegan granted an order restraining Fusco's delivery to the Northern Ireland authorities and ordering he appear before the High Court tomorrow morning.