A QC told two High Court judges that extraditing Gary McKinnon, 43, who suffers from Asperger's Syndrome, would lead to "disastrous consequences" because of his medical condition, including possible psychosis and suicide.
Mr McKinnon, from Wood Green, north London, is asking the judges to overturn a refusal by Keir Starmer QC, the Director of Public Prosecutions (DPP), to put him on trial in the UK on charges of computer misuse.
If there is no UK prosecution, Mr McKinnon would inevitably be extradited to stand trial in the US, the judges heard.
Edward Fitzgerald QC, appearing for Mr McKinnon, accused the DPP of misapplying the law when he decided there was "insufficient evidence" to support a UK prosecution under the Computer Misuse Act - even though the hacker had admitted his crimes.
Mr Fitzgerald said the DPP had also failed to confront the new evidence concerning Mr McKinnon's medical condition and deal with the human rights issues it raised.
If sent to the US, Mr McKinnon was likely to receive a substantial prison sentence, possibly served in a Supermax prison used for high risk inmates, and was unlikely to be repatriated to serve his sentence.
The process of extradition, trial and serving his sentence would inevitably expose Mr McKinnon to "an avoidable and unnecessary risk of serious psychological suffering" with "all of the attendant disastrous consequences".
Mr Fitzgerald argued both the DPP and Crown Prosecution Service were failing in their duties to take account of the humanitarian factors.
The CPS had also failed totally to explain the difference in treatment between Mr McKinnon and other defendants who had targeted US computer systems and committed similar offences but were tried in the UK.
Lawyers for the DPP are arguing the decision not to prosecute was "entirely rational" and was "manifestly not one which is susceptible to judicial review".
A key issue is that, although Mr McKinnon has admitted to computer hacking and leaving a message in US military systems saying "I will continue to disrupt", his lawyers say that his intention was only to cause "temporary impairment".
The Americans say the offences were much graver, and the DPP and CPS argue there is insufficient evidence in the UK for a trial that would "reflect the full gravity" of the charges the Americans wish to bring.
Mr McKinnon's mother, Janis Sharp, who was at today's hearing with her son, said: "I will not give up this fight until the Government intervenes to protect my vulnerable son.
"The inconsistency shown by the Crown Prosecution Service in deciding which cases to prosecute is deeply unfair and has caused years of anguish for us all."
She said her son was a "gentle, misguided Asperger's sufferer".
The actress Trudie Styler, wife of rock star Sting, who has campaigned against the extradition and is also attending the hearing, said:
"Someone at the highest levels of government must now take responsibility and say enough is enough.
"Plain common-sense dictates that he should be tried in the UK. I look forward to somebody with the necessary clout stepping up to the plate and making that happen."
Former Home Secretary Jacqui Smith decided last October to order Mr McKinnon's removal following a request from the US prosecuting authorities after previous legal challenges failed.
The current Home Secretary Alan Johnson has insisted he has no power to demand that the trial take place in the UK.
The US authorities say Mr McKinnon was responsible for the "biggest military hack of all time", involving 97 government computers belonging to organisations including the US Navy and Nasa.
He has admitted breaking into the system in 2001-2 during a period of heightened security in the wake of the 11 September 2001 attacks. But he claims he was looking for evidence of extra-terrestrial life.
The US government alleges his conduct was intentional and calculated to influence and affect it by "intimidation and coercion". It says the cost of repair totalled more than 700,000 US dollars (GBP436,000).
Campaigners seeking to block his extradition say he acted through "naivety" as a result of Asperger's - a form of autism which leads to obsessive behaviour - and should not be considered a criminal.
Today's application for judicial review at the High Court in London is the second recent legal challenge.
In the first, Edward Fitzgerald QC accused the Home Secretary of reaching a "flawed" decision in the light of the uncontradicted medical evidence of the severe mental suffering that extradition would cause.
The QC described Mr McKinnon as "an eccentric person who has passionate views about UFOs".
The judges are expected to give their ruling in both legal challenges later this month.
David Perry QC, appearing for the DPP, said Mr McKinnon had been told in
2002 that he would not be prosecuted in the UK, but did not seek a judicial review then.
Instead he had gambled on a series of legal actions to avoid extradition and "thrown the dice and lost at every level".
"His true complaint is not that he is not being prosecuted. His true complaint is that he is being extradited," said Mr Perry.
Now, in a "last gamble", he had brought in the DPP and asked in "an unseemly process" that the case against him be looked at again. It was being said that the DPP was under an obligation to obtain information from the US authorities to see whether the "information gap" between the US and the UK relating to the allegations against Mr McKinnon could be reduced so that criminal proceedings could be launched in the UK.
Mr Perry told the court this was "conceptually wrong".
The aim was to thwart the extradition process and involved the DPP trying to obtain information that the US, under extradition law, was not obliged to provide.
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