David Tamihere believes he should be entitled to a "quite huge" payout from the Crown for the 20 years he spent in prison now charges of murder have been withdrawn.

On Wednesday, the Crown decided not to pursue a retrial of Tamihere for the 1989 murders of Swedish backpackers Heidi Paakkonen and Urban Höglin.

Justice Simon Mount discharged Tamihere on the two charges of murder and said he was free to go.

Speaking outside court, Tamihere said he would be having discussions on the matter of compensation with his lawyers.

"I'd like to do it at the level that was around when I first got convicted ... it's quite huge," he said.

Former High Court judge Hon Rodney Hansen, KC, was appointed to oversee two high-profile claims for wrongful murder convictions and imprisonments - Teina Pora, who got $3.5 million and Alan Hall, who was awarded $4.9 million.

He said it usually fell to a retired judge or King's Counsel to determine whether an applicant was innocent on the balance of probabilities - a lower threshold than "beyond reasonable doubt" that is required to convict in a criminal trial.

"That's the first hurdle, if you like, that lies ahead of him. And it's the first step that has to be taken in the compensation process."

It could be a long and arduous process, and there was a huge weight of responsibility on those overseeing the claim.

"It's such an important matter. A) for the individual, of course, and B) I suppose some sort of public assertion that where a wrong has been done it will be righted.

"So yes, it's a very important part of the process and any decision maker entrusted with the job of making it treats it with the seriousness appropriate to the gravity of their task.”

Sometimes it could be a very complex and difficult process, he said. Other claims, like that of Pora, were more straightforward.

"I didn't even find that a sort of close-run thing in the end. I concluded that it was so clear that he was innocent, that he had actually proved it to the standard of beyond reasonable doubt, not simply the standard he was required to."

Should Tamihere be found innocent on the balance of probabilities, there would be a number of types of compensation available to him.

These included $150,000 for each year he spent in custody, $100,000 a year for loss of livelihood and $75,000 a year for time spent on restrictive bail or parole.

"There is also provision for an award of a sum to recognise any impropriety in the way that the prosecution or the inquiry itself might have been conducted, so that if there has been irregularity, impropriety, or worse, then an additional sum can be included in the overall package," Hansen said.

It is ultimately a matter for Cabinet to approve a compensation claim.

Höglin, 23, and Paakkonen, 21, were last seen in Thames in 1989. Their disappearance and the subsequent trial was one of New Zealand’s highest-profile crimes. Many aspects remain a mystery. Höglin's body was found in 1991, after Tamihere had been convicted, but Paakkonen's body has never been found.