In the grand main hall of London's Royal Courts of Justice, just before 2pm yesterday, the frail figure of Sean Hodgson walked tentatively through crowds of tourists and schoolchildren towards his brother, Peter. After a moment's hesitation in which it appeared that a shy handshake would be exchanged, the pair shared a tearful embrace so intense it lifted the fragile 57-year-old off his feet.

It was the first time the two men had come face-to-face outside of prison walls in more than 27 years. The television crews and cameramen waited outside to document Mr Hodgson's first steps of freedom.

He had not enjoyed such freedom since being wrongly convicted of the murder and rape of 22-year-old Teresa De Simone. The barmaid was sexually assaulted and strangled in her car in Southampton in 1979. The following year, while in prison for other offences, Mr Hodgson, then 28, confessed to the killing, knowing he was innocent.

At his trial in 1982, he pleaded not guilty and tried to explain to the jury that he had lied about the murder. But its members did not believe him and convicted Mr Hodgson after just three hours' deliberation. An appeal in 1983 failed and he remained imprisoned.

At 10.30am yesterday Mr Hodgson was still behind bars – the black steel bars of the dock in Courtroom 4 at the High Court. There he sat, listless and almost oblivious to the proceedings. His barrister Julian Young told the court that his client's conviction was unsafe; that he was innocent; that new DNA evidence had proven this; and that he should be freed immediately.

The Crown Prosecution Service (CPS) agreed. "Plainly this conviction is unsafe," said the CPS solicitor Sarah Whitehouse. "And it cannot be allowed to stand. For this reason we do not oppose the application." As did the Lord Chief Justice, Lord Judge, who said the conviction would be quashed and Mr Hodgson discharged.

While waiting for his brother's release to be processed, Peter spoke of his sorrow that their parents had not lived to see their son proved innocent. "My Ma and Pa went to the grave not knowing," he said. "I will take some flowers up to their grave on Sunday."

Later, Mr Hodgson and his brother were reunited. From the halls of the court, they made their way outside where they stood on the steps of the High Court, posing for the snappers. When his barrister motioned for him to return inside, Mr Hodgson insisted, "No", then motioned towards the press pack. "I want to go down there."

First Peter spoke. Kissing his brother on the cheek, he said: "I would like to thank the solicitors: a million, million thanks. I have had a dream for 27 years. I know it has been a hell of a long time coming, but it has finally come true." Then Sean. Asked how he felt he replied: "Ecstatic. It is great to be free again. I would like to thank my barrister." Asked whether he ever thought he would be freed he replied: "No."

Ms De Simone was killed in her car after a night out with a friend on 5 December 1979. She had returned from a nightclub to collect her vehicle, parked behind Southampton's Tom Tackle pub, where she worked. The prosecution alleged that, upon getting into the car, she put her handbag into the back seat and inadvertently disturbed a man who had broken in and fallen asleep. He, it was claimed, then strangled and raped her.

In 1980 Mr Hodgson did himself no favours by admitting on several occasions that he had committed the murder. Moreover, his numerous confessions – to a priest, a prison officer and several police officers – included seven details that the prosecution claimed only the killer could possibly know.

Mr Hodgson appeared to know the precise position that the woman's body was found; the items of clothing which had been torn; that foam and froth had come out of her mouth; that she had been strangled with items of her own clothing; the extent of the sexually inflicted injuries; and that a neighbour had looked out of the window and saw a man being sick.

He also correctly identified that a comb found in the car was a prison-issue comb, and claimed it was his as he had scratched his initials on it. Examination found there were indeed (indecipherable) scratches on the comb. And, when arrested, officers found keys in his pocket. He told them it was a "jiggler" and could open any model of Ford car. He said that was how he had broken into Ms De Simone's car. Officers tested it successfully on her vehicle.

At the Winchester Crown Court trial in 1982, the defence based its case on Mr Hodgson's pathological lying, explaining that he had also owned up to two other murders, both in London, neither of which had even occurred.

But the defence refused to put Mr Hodgson in the witness box. Instead he was allowed to make a statement from the dock on which he could not be cross-examined. "I would like to tell the members of the jury why I cannot go into the witness box. It is because I am a pathological liar," he said. "I did not kill Teresa."

That failed to convince the jury and yesterday Mr Hodgson's original trial barrister, Robin Grey, spoke of his sorrow that his client spent 27 years in prison for a crime he had not committed. "As a defence lawyer you feel, 'If this man was innocent then why could I not get him off?' So I have a bit of a feeling of guilt. Thank God there was no capital punishment."

After 27 years in prison, much of that time spent in psychiatric wards, Mr Hodgson left yesterday with his freedom and one other gift. Among his belongings was a silver watch handed to him by the governor of Wandsworth prison; a reminder of more than a quarter of a century spent at Her Majesty's pleasure. As Sean Hodgson left the prison yesterday, the same governor told him: "Three more years and it would have been a gold one."