A British soldier accused of overcharging a US institution for a contract with his private security firm will be extradited to the United States, the Home Office said Monday.

David McIntyre, 42, who could get up to 20 years in jail if convicted in the US, said the decision by Home Secretary Theresa May came like a "death knell".

McIntyre, formerly a member of the Queen's Lancashire Regiment and Royal Military Police and still a reservist with the Territorial Army, faces eight charges of fraud in relation to a contract with the United States Institute of Peace (USIP).

USIP is an independent, federally-funded body based in Washington DC which aims to prevent and limit the impact of conflicts abroad.

McIntyre denies claims that Quantum Risk, the now defunct security company he set up after leaving the army, overcharged the organisation by $100,000 (??65,000)

McIntyre, who served in Afghanistan, says he is suffering from post-traumatic stress disorder.

His lawyers warn he could act "impulsively, dangerously and potentially tragically" if extradited.

The Court of Appeal rejected his appeal against extradition in March but the Home Office agreed to suspend extradition pending further representations to the Secretary of State on his mental health.

"These representations have been carefully considered and it has been decided that proceeding with extradition would not breach his human rights," a Home Office spokesman said Monday.

McIntyre, of Worsley, Greater Manchester, said he was "really disappointed by the decision".

"I can't put it into words. It's like a death knell," he said, adding: "There's no substance and I completely deny everything.

"I've never said I'm not prepared to stand in the dock -- but to do it in the US, I know how they work."

His lawyer Karen Todner, of Kaim Todner solicitors, which successfully fought to prevent computer hacker Gary McKinnon from being extradited to the US, said her firm was considering whether it could seek judicial review.