The Federal Government has sought special leave to challenge a Federal Court decision which has stalled the extradition of an 89-year-old Perth man to Hungary to face allegations of war crimes.

Charles Zentai has spent six years fighting his extradition to Hungary where he is wanted for questioning over the murder of a Jewish teenager in 1944.

Home Affairs Minister Brendan O'Connor approved the extradition in 2009 but the Federal Court quashed that decision after the judge ruled Mr O'Connor had made an error.

The Commonwealth appealed against that decision and was partially successful but the Full Court found Mr Zentai could not be surrendered for war crimes because it was not a criminal offence under Hungarian laws in 1944.

Mr O'Connor now needs to determine what constitutes a war crime before the case can continue.

A spokeswoman for the minister says the finding raises a significant issue for the administration of Australia's extradition regime.

abc.net.au