TORONTO - A man who spent 31 years behind bars based on a confession he recanted wept Thursday after Ontario's top court struck down his murder conviction and ordered a new trial because important evidence was not disclosed to his defence.

While the Ontario Court of Appeal's decision made Romeo Phillion the longest-serving individual to have a murder conviction overturned, the court made it clear it had not concluded Phillion was innocent.

Despite falling short in his quest for exoneration, the 69-year-old called the ruling "a dream come true."

"I'm happy, what else can I say?" an emotional Phillion said. "I'm innocent, what else can go wrong?"

Both Crown and defence have agreed there would be little point in retrying him for the 1967 stabbing death of Ottawa firefighter Leopold Roy because the murder happened so long ago.

The province's attorney general must now decide whether to stay or withdraw the charge. The prosecution could also decide, as Phillion's legal team wants, to arraign him anew but offer no evidence -- which would lead to an outright acquittal.

Attorney General Chris Bentley said he wanted to take a "couple of weeks" to review the lengthy decision.

"We want to make sure that we get it right, so I'll take as little time as possible but as much time as we need," Bentley said.

Phillion's lawyer James Lockyer said the court's decision lifted an "awful burden" from his client.

"Today's a good day, a day to smile," Lockyer said.

In his majority ruling, Appeal Court Justice Mike Moldaver found the prosecution at Phillion's 1972 trial never told the defence that investigators had, at one point, concluded Phillion was far from the crime scene and could not have been the killer.

Police claimed they had later debunked the alibi and therefore the prosecution had no duty to tell the defence about it.

Phillion found out that police had verified his alibi a quarter century after his conviction when a parole officer slipped the information to him in a brown envelope.

If the jury that convicted Phillion of second-degree murder had the opportunity to hear evidence about the alibi it's possible they might have reached a different verdict, Moldaver found.

The Appeal Court also concluded Phillion's spontaneous confession to police four years after the murder -- the basis for his conviction -- was "compelling" in its accuracy and detail but was wrong on one key fact.

A jury might also have viewed the confession differently had the lead detective been cross-examined on the alibi evidence, Moldaver wrote in a decision supported by Justice John Laskin.

But Moldaver made it clear the court's ruling was not a declaration of innocence.

All that can be said, Moldaver said, is that the alibi evidence might have changed the result of the trial.

"I have no hesitation in concluding that this is not a case in which a verdict of acquittal should be substituted," Moldaver wrote. "Rather it is one that calls for an order for a new trial."

Phillion's confession, the absence of a clear-cut indication of his innocence, and the length of time since the crime set his case apart from others where the courts have decided there was a miscarriage of justice.

Moldaver called Phillion's case "exceptional if not unique," saying it was "anything but normal."

In his dissenting opinion, Justice James MacPherson argued strongly that Phillion's confession four years after the crime showed a level of detail that only the killer could have known.

MacPherson also said he could not believe police and Crown would have proceeded knowing the accused had nothing to do with the killing, he said.

Phillion always refused to seek parole, saying it would amount to an admission he had killed Roy. He was finally released in 2003 on bail pending the appeal hearing.

He never explained why he confessed, but his lawyers said he was trying to look big and impress his gay lover.

Moldaver said he remained troubled by "a host of unanswered and now unanswerable questions" around Det. John McCombie's initial verification of Phillion's alibi as documented in a report in April 1968 and its subsequent debunking for which there is no documentary evidence.

The justice said he was at a "stalemate" on whether the alibi was disproved but nevertheless concluded the jury should have heard about the issue given its importance.

"That is the `stuff' that reasonable doubt is made of," Moldaver said, adding that McCombie had been "less than forthcoming and hardly enlightening" during Phillion's preliminary inquiry.