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This article was written by Jo Adetunji and Matthew Weaver, for guardian.co.uk on Wednesday 21st July 2010 07.37 UTC

The computer hacker Gary McKinnon could avoid extradition to the US by serving time in a British prison, David Cameron has suggested after raising the issue in talks with Barack Obama.

Following his meeting at the White House, the prime minister told BBC Radio 5 Live that the government has discussed with the US ambassador the possibility of “some of the (sentence), if there is a prison sentence, being served in a British prison”.

“That is one potential outcome and I’ll be working very hard to make sure that these things are discussed between the two governments. If we can reach a settlement then all to the good. I don’t want to make a prediction because there are many difficult issues that have to be worked through.”

His remarks suggest officials are nearing a deal to avoid McKinnon’s extradition to the US, where he faces up to 60 years in prison. Last night, in his first remarks on the issue as prime minister, Cameron said McKinnon was accused of a “very important and significant crime” but he hoped that “a way through” could be found.

Speaking at a White House press conference alongside Obama, Cameron said: “Clearly there is a discussion going on between the British and the Americans about this, but I don’t want to prejudice those discussions.”

Obama said a solution should be found within the law but in the context of the “co-operative relationship” between the US and the UK.

“I trust that this will get resolved in a way that underscores the seriousness of the issue, but also underscores the fact that we work together. We can find an appropriate solution,” Obama said.

Cameron and Nick Clegg, the deputy prime minister, have publicly criticised plans to extradite McKinnon. Last year, Cameron said that there was “a clear argument to be made that he should answer [any questions] in a British court”.

McKinnon claims he only hacked into US systems in 2001-2002 to search for evidence of UFOs. Campaigners for McKinnon, who has Asperger’s syndrome, an autism spectrum disorder, said they were “overjoyed” and hoped Cameron’s comments signalled a resolution to their eight-year campaign.

Janis Sharp, McKinnon’s mother, said the discussion was a landmark moment: “I’m very proud that David Cameron has the guts to stand up for a British citizen – it’s wonderful. Our hopes are that a trial will happen in the UK and there’s much more chance of that now … It’s not over yet but it has given us hope.”

Speaking on GMTV, she said: “It was amazing that we’ve now got someone brave enough in government to actually stand up for British citizens and to raise it with Obama.”

McKinnon’s lawyer, Karen Todner, said: “We’re very pleased that David Cameron has raised this and had a face-to-face discussion about Gary. Obama has used the term appropriate solution and the appropriate solution is that he stands trial in the UK.”

Last year Alan Johnson, the former home secretary and Theresa May’s predecessor, ruled that McKinnon could face extradition and trial in the US, but his lawyers were granted permission for a judicial review into whether the decision breached his human rights.

The case took another turn when May stepped in to adjourn the review days before it was due to start, to consider whether McKinnon is fit to stand trial in the US. The home secretary is still considering the issue.

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