Sydney - An 87-year-old Australian citizen accused of killing a Jewish teenager in his native Hungary in 1944 Tuesday lost his latest court battle to prevent extradition to face war crimes.

Charles Zentai received an adverse finding in his appeal to the Federal Court over a magistrate's ruling that he was eligible for surrender to Hungary.

Zentai will remain in prison until a further appeal is heard before the full bench of the Federal Court.

His son, Ernie Steiner, said the family would fight on.

"While we've still got that hope we just look to the next step," Steiner told reporters. "We place trust in the Australian system and my father has that right, he is exercising his right to justice."

Zentai denies an accusation from the Simon Wiesenthal Centre that he participated in the fatal beating of 18-year-old Peter Balazs in Budapest.

Zentai and two fellow soldiers are alleged to have tortured and killed Balazs before dumping his body in the Danube River. His two alleged accomplices were jailed over the murder in the 1940s.

An extradition request for Zentai, who emigrated in 1950, was received from Hungary in 2005.

Steiner said correspondence between the family and the Budapest Military Tribunal, which would try his father, had confirmed doubts he held about the chances of receiving a fair trial in Hungary.

"I am sure that many Australians would like to know a bit more about the Hungarian military courts before our government sends an 87-year-old citizen back to face them," he said. (dpa)