But in chaotic scenes the decision was overridden two hours later when Swedish prosecutors said they would challenge the decision. As a result the 39-year-old Australian returned to Wandsworth prison, in south west London, where he is being held in solitary confinement.
He will appear at the High Court within 48 hours where a more senior judge will consider the appeal and whether to overturn the bail decision. Speaking on the steps of City of Westminster Magistrates’ Court, his lawyer Mark Stephens attacked the Swedish authorities.
He said: ‘Finally, after two hours we have heard that the Swedes will not abide with the umpire’s decision and they want to put Mr Assange through yet more trouble, more expense and more hurdles.
‘They clearly will not spare any expense to keep Mr Assange in jail. This is really turning into a show trial.’
Asked how Assange, who earlier gave a thumbs up to photographers from a prison van window, reacted to the news, Mr Stephens said: ‘He is phlegmatic.’
The whistleblower is wanted in Sweden over claims he sexually assaulted two women during a visit to Stockholm in August. But his supporters claim the criminal inquiry and extradition request is unfair and politically motivated.
The former computer hacker is behind the release of hundreds of United States diplomatic cables that have caused global uproar. Assange was denied bail at his first court appearance one week ago on the grounds he could flee the country.
The decision to appeal was the final twist in a day of extraordinary drama in the mundane setting of the Westminster courthouse. Supporters and journalists queued for hours to win tickets to court number one where Assange was due to appear at 2pm.
Meanwhile hundreds of protesters besieged the building, chanting for Assange to be released and attacking the authorities in Sweden and United States. High-profile supporters including socialite Jemima Khan, novelist Tariq Ali, campaigner Bianca Jagger and film-maker Ken Loach all offered sureties.
They were joined by veteran journalist John Pilger, gay rights activist Peter Tatchell and Frontline Club founder Vaughan Smith. Others who had pledged support and were waiting in the wings included author Hanif Kureishi and filmmaker Michael Moore.
Assange, wearing a black suit and white shirt, waved to his lawyer as he arrived in the packed courtroom where some were sat on the floor. Lawyer Gemma Lindfield, on behalf of the Swedish authorities, said ‘nothing has changed’ and Assange remains a ‘flight risk’.
But after an hour-long hearing Judge Howard Riddle disagreed and granted Assange bail on the condition he deposited £200,000 in cash at the court. He also ordered that a further two sureties were given, each to the value of £20,000, and imposed a string of strict bail conditions.
These included that Assange is electronically tagged and lives at Ellingham Hall near Bungay in Suffolk, a property in 600 acres of private grounds. The estate is owned by Mr Smith, who served in the British Army before setting up the journalists’ club in Paddington.
The Australian must also leave his passport with police, observe a curfew and report to a police station every day. Speaking after the hearing Assange’s mother, Christine, said: ‘I am very happy with the judge’s decision and I thank you all so much for supporting Julian.’
Bianca Jagger, who attended in her capacity as a human rights campaigner, confirmed after the hearing that she had not provided any money.
'I am very concerned that this case is becoming politicised,' she told the media.
'If there are valid accusations against him then let them be heard.
'I don't agree with everything he has done but the most important thing in law is justice, due process and freedom of expression.'
Film director Ken Loach said: 'If the Swedish government oppose bail it will show there is some vindictive element beyond this case.'
Socialite Jemima Khan, who earlier offered a surety on behalf of Assange, said: 'It's great news. I can hear them all cheering outside.'
Prior to yesterday's hearing Michael Moore had called for supporters to attend a demonstration outside court. It said: 'If you're reading this in London, please go support Julian Assange and WikiLeaks at a demonstration at 1pm today, Tuesday the 14th, in front of the Westminster court.'
Many people took up the invitation and protested outside the court with banners and signs, while some even brandished copies of the current edition of Time Magazine, which features Assange on its cover.
The scene outside the court was controlled bedlam as the protesters and police mixed with international media. The crowds made the small, staired entrance to the court almost impassable.
Dozens of police officers corralled a vocal and diverse protest behind metal fencing on the other side of the road. A squad of officers helped celebrity Jemima Khan as she walked into court amid chaotic scenes to again offer a cash surety, as was the case with veteran journalist and campaigner John Pilger.
Among those leading the protest were gay rights activist Peter Tatchell and Lindsey German of the Stop the War campaign group. Some demonstrators wore masks representing comic book hero V, from V for Vendetta, and others used scarves to conceal their identity.
Many carried placards mocking the British and Swedish authorities as well as black and white images of Assange. One read: 'Sweden, puppets of the US', another said 'There is something rotten in the state of Sweden' and many said 'Exposing war crimes is not a crime'.
Others gave out leaflets campaigning for an end to the 'unfair' European Arrest Warrant and outlining support for the free flow of information. As the man himself arrived in a prison van photographers rushed to the side of the van to snap pictures of him through the windows, resulting in the image above.
As that picture shows, being in custody is no bar to Assange getting messages out through the media. Earlier yesterday he backed the cyber attacks on Visa, Mastercard and PayPal from his prison cell, branding the companies 'instruments of U.S. foreign policy'.
He gave a written statement to his mother, Christine, when she visited him in London where he is in custody fighting extradition to Sweden for alleged sex offences.
Internet activists launched 'Operation Payback' to avenge WikiLeaks against those perceived to have obstructed its operations by refusing to process payments to the website.
The campaign temporarily brought down the websites of credit card firms Visa and MasterCard, as well as that of PayPal and the Swedish government, last week. Assange's statement said: 'We now know that Visa, Mastercard, PayPal and others are instruments of U.S. foreign policy.
'It's not something we knew before.
'I am calling for the world to protect my work and my people from these illegal and immoral attacks.'
The statement was a response to a request from an Australian TV network who asked Christine Assange to put one question to her son during her visit; 'Was it worth it?'
'My convictions are unfaltering,' Assange's statement continued.
'I remain true to the ideals I have expressed. This circumstance shall not shake them.
'If anything this process has increased my determination that they are true and correct.'
Christine Assange defended her son and said both were heartened by international support for him.
'I told him how people from all over the world, all sorts of countries were standing up with placards and screaming out for his freedom and justice and he was very heartened by that,' she said.
'As a mother I am asking the world to stand up for my brave son.'
The former hacker has provoked fury among international governments with his disclosure of 250,000 secret U.S. cables obtained by WikiLeaks.
Assange was accused this year of sexual misconduct by two female Swedish WikiLeaks volunteers during a stay in Sweden and turned himself in to Scotland Yard detectives last week.
He denies the allegations, which include rape and molestation in one case and molestation and unlawful coercion in a second, which he has said stem from a dispute over 'consensual but unprotected sex'.
His legal team has claimed Swedish prosecutors have been put under political pressure to restart their inquiry to help silence and discredit Assange. The decision to remand him in custody came despite the offer of a £180,000 surety - from backers including John Pilger, Jemima Khan and Ken Loach - on the grounds there was a risk Assange would fail to surrender.
For his second director Michael Moore revealed his support by posting his witness statement to the court, offering $20,000 in surety, on his website, along with a detailed explanation of his reasons for doing so. He described Assange as 'a pioneer of free speech, transparent government and the digital revolution in journalism.'
Assange and his lawyers have voiced fears that U.S. prosecutors may be preparing to indict him for espionage after the WikiLeaks website published the secret U.S. documents.
Senior politicians have said WikiLeaks has jeopardised United States national security and diplomatic efforts around the world. According to his lawyer, Assange has not been handed any of his mail since he was jailed, with even his legal letters failing to reach him.
Mark Stephens, who is representing him, said: 'Many hundreds of people have written to him and the authorities at Wandsworth Prison have not yet given him his letters, including legal letters.'
The only letter to reach him during the week he has spent in the prison's segregation unit was a slip telling him that a copy of Time magazine sent to him had been destroyed as the cover bore his photo, Mr Stephens said.
'He has absolutely no access to any electronic equipment, no access to the outside world, no access to outside media,' he said.
'Time magazine sent him a copy of their most recent edition with a compliments slip. The prison destroyed the whole magazine.'
The American news publication pictured Assange on the front with an image of the U.S. stars and stripes flag gagging him. The former hacker has been on 23.5-hours-a-day 'lockdown' in the south west London prison, taking his meals in his cell, his lawyer said.
He is kept under surveillance on infrared video. A prison source said Assange was being treated like any other inmate held in the segregation unit, which is where he had requested to be.
The case has become an international cause celebre as governments weigh up the damage to their reputations with the right to freedom of speech. Around 15 supporters of the Justice for Assange Campaign gathered outside the Swedish Embassy in central London yesterday, wearing masks bearing Assange's face and gagging themselves with US flags.
Slogans on their banners included 'political prisoner', 'gagging the truth' and 'honey trapped in Sweden'. The London-based campaign group was set up by a group of media workers after Assange was arrested.
Documentary film-maker Sharon Ward said: 'We felt we had to do something. We owe a lot to what WikiLeaks are doing today.'
She claimed that the U.S. was behind the arrest, and was concerned that it could result in Assange facing charges there.
'I do think it's politically motivated and I think they are just trying to get hold of him any way they can,' she said.
'It's quite well documented that the U.S. are desperately trying to invent charges for him.'
She added: 'I think back-door extradition is going to happen here.'
A ComRes poll for CNN found more than four out of 10 British people (44 per cent) believe the charges are an excuse to get Assange into custody so the Americans can prosecute him for releasing secret diplomatic papers. The same percentage said they believed he should be sent to Sweden to face questioning when ComRes interviewed 2010 adults online between December 10 and 13.
Mr Stephens warned it could still take an ‘inordinate’ length of time to get the bail money together and joked that his client could hardly use Visa or Mastercard. The payment giants have joined a raft of international companies, including Amazon’s web services and PayPal, who have suspended their support of WikiLeaks.
Warning the extradition process could take ‘many years’, Mr Stephens said: ‘Until then we have an innocent man in Dickensian, Victorian conditions in Wandsworth jail.’
Mr Stephens branded the bail conditions ‘Orwellian’ and said he would ask to relax them at a later date and said his client could not speak to other prisoners at Wandsworth Prison and was locked up for 23 hours a day.
He added that mail was not getting through and a copy of Time magazine featuring Assange was ‘ripped up by the censors’ and he was only given an empty envelope.
Mr Smith said: ‘The Julian Assange I know has a number of qualities: he’s a very honourable person, hugely courageous, self-deprecatory - none of the things you read about.’
Assange's court appearance came as the latest WikiLeaks releases revealed U.S. concerns that the UK was struggling to cope with homegrown extremism in the wake of the July 7 bomb attacks in London.
They also revealed that British police helped 'develop' evidence against Madeleine McCann's parents as they were investigated by Portuguese authorities looking into their daughter's disappearance.
