In a blow to US President George W Bush and the US military, America's Supreme Court has ruled the controversial military commissions set up to prosecute Australian David Hicks and other Guantanamo prisoners were illegal.
Mr Howard said he was not embarrassed by the ruling but admitted his government, and the US administration, were incorrectly advised that the military commission process was lawful.
He said the US government had to move fast to find another process to try Hicks and the other detainees at the US naval base in Cuba.
"What now has to happen is that, quite quickly in my view, the administration has to decide how it will deal with the trial of the people who are being held," he told Southern Cross broadcasting.
"Our view in relation to Mr Hicks is that he should be brought to trial.
"As the military commission trial is regarded by the court as unconstitutional, there clearly has to be another method of trial - a court martial or a civilian trial - which conforms with the
Supreme Court decision."
Hicks 'must be freed'
But a Melbourne lawyer linked to the US-based case said the Australian government must make an immediate request to the US administration for the release of Mr Hicks.
Lex Lasry, QC, who is the Law Council of Australia's independent observer on the case, said "David Hicks has been in US custody for more than four years and there is obviously no immediate prospect of him being tried in a properly constituted court as the US Supreme Court judgment requires.”
"Any further delay while they, yet again, rebuild the system would be grossly unfair and completely unacceptable."
Mr Lasry also said there was a "very strong argument" that under a properly constituted court martial, or civilian court, there was no case for Mr Hicks to answer.
The court's ruling had also vindicated the concerns of Hicks' legal team surrounding the military commission process, he added.
Mr Hicks's US military lawyer Major Michael Mori said "the ball is now in the Australian government's court.”
"Just yesterday, (Australian Foreign Affairs Minister) Alexander Downer said they would reconsider their decision if the Supreme Court found the commissions were unacceptable.
"The Supreme Court has found them illegal. I expect them to stick to their guns and follow through and reconsider David's detention.
"The court marital is what we've asked for all along.”
Bush 'to decide fate'
But Federal Human Services Minister Joe Hockey says it's up to Mr Bush to decide what to do with Mr Hicks.
"We have been pushing and pushing the US government to put him to trial - to try him and have him convicted," he said.
"There has been a lot of legal argy bargy. Now the US Supreme Court, the highest court in the US, has said that they believe the Guantanamo Bay process is wrong ... and the ball is now back in President Bush's court.
"Obviously, we will be waiting for the US government to find out what they will do now with Hicks.
"David Hick was not organising a tea party, he was allegedly involved in very serious activities.”
Federal Opposition childcare spokeswoman Tanya Plibersek called on the federal government to bring Hicks home.
"You can't leave someone indefinitely in detention in the hope that one day some evidence will turn up against him," she told the Seven Network.
"Try him, convict him, or release him."
Yesterday, Justice Minister Chris Ellison said Mr Hicks would serve his jail sentence in Australia if convicted by a US military commission.
"We do now have an agreement in place for Mr Hicks to be transferred to Australia in the event that he was imprisoned for a period of time," Mr Ellison said.
The Australian is one of only 10 of the more than 400 detainees at Guantanamo to have been charged with terrorism offences.
He has pleaded not guilty to charges by the US military commission of conspiracy to commit war crimes, attempted murder and aiding the enemy.