CPS refused prosecution on the ground that most of the evidence rests in the US, which obviously would cost a fortune to bring back to the UK. However, I don't fully understand the decision, given that McKinnon confessed and thus showed his intention to plead guilty. If he pleas guilty, there is more or less no assessment of evidence, thus whether it's in the US or not does not matter. If I am right, then it raises the question of why the CPS does not want to prosecute and are happy to leave their American colleagues facing the burden of proof...
"Nasa hacker closer to extradition after CPS refusal " (ZDNet.co.uk, 26 February 2009)
"Parliamentary support builds for Nasa hacker " (ZDnet.co.uk, 25 February 2009)
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