A man named as a person of interest in the disappearance of NSW toddler William Tyrrell will walk from prison after being granted bail on unrelated historical child sex abuse charges.
William Spedding, 63, is alleged to have sexually assaulted two girls, aged three and six, in a caravan in Sydney's southwest in 1987.
The historical charges came about after detectives looked into Spedding during their investigation into the disappearance of three-year-old William Tyrrell.
Spedding, who appeared at his Supreme Court bail decision via videolink from Cessnock prison, denies any involvement in young William's disappearance and disputes the historical sex abuse charges.
Justice Geoffrey Bellew granted Spedding conditional bail on Friday, saying he does not agree with the crown's argument that the case against the whitegoods repairman is "strong".
Justice Bellew said that while medical evidence indicates the two victims were indeed assaulted, one of them has no recollection whatsoever of the alleged offence.
"It's difficult to accept the crown's submission that the crown case is strong ... where one of the victims apparently has no recollection at all of the incident," he said.
He added there would also be "a real issue" as to whether or not one or both of the complainants were "coached" or "cajoled".
An initial investigation into the allegations in the immediate aftermath was dropped, and the extent of that investigation "remains unclear".
He added that Spedding's designation as a person of interest in an ongoing investigation had no bearing on the historical charges.
The court heard Spedding's brother, David, would put up his life savings - $100,000 - as surety, and his wife, Margaret, had stated that no children would live with them if her husband was granted bail.
Justice Bellew said Spedding had no prior criminal convictions and is unlikely to pose a flight risk.
As part of his bail conditions, Spedding must not associate with minors and must not contact witnesses.
At a previous bail application hearing on Wednesday, the court heard a convicted pedophile was living in the same house as the alleged victims shortly before the offences are alleged to have been committed in April or May 1987.
Spedding's solicitor, Peter O'Brien, told the court the medical records didn't show when the abuse occurred and said an injury found on one girl could have happened in the months prior to April.
