THE Australian accused of killing Huddersfield backpacker Peter Falconio has bragged that he will win compensation for wrongful arrest.

Bradley Murdoch, 45, told a fellow inmate: "I'll be found innocent."

The trucker said he would sue and live off the cash for the rest of his life.

British backpacker Danny Boulton, 31, was imprisoned in the cell next to Murdoch at Darwin in the Northern Territory after being arrested for overstaying his Australian entry visa.

Mr Boulton said: "He truly believes the court case against him is going to fail and he is then going to sue the Australian Government and make lots of money."

Murdoch goes on trial next April accused of the murder of Mr Falconio, 28, from Hepworth.

Murdoch allegedly abducted Mr Falconio, 28, and his girlfriend Joanne Lees on the Stuart Highway in July 2001.

Ms Lees, from Almondbury, escaped, but her boyfriend was never seen alive again.

Mr Boulton said that while Murdoch never went into details of his defence he gave the impression that he had a "smoking gun" yet to be revealed in court.

"He is so sure that he is going to get his case thrown out - it may be that he knows something nobody else does," he said.

Mr Boulton said Murdoch was getting special favours and treatment in prison.

"He had privileges that normally take a lot of time to earn - he seemed to command some sort of respect," Mr Boulton said.