CONGOLESE warlord Mathieu Ngudjolo Chui has been cleared of all charges of war crimes and crimes against humanity by the International Criminal Court.

The verdict – only the second in the ICC's 10-year history and its first acquittal – is a setback for prosecutors who judges said had failed to link the former militia leader to atrocities in north-east Congo in 2003.

The verdict also raises doubts about the case against Ngudjolo's better-known co-accused, warlord Germain Katanga, who is charged with similar crimes.

Judges prolonged Katanga's trial last month, a move that some academics say could make it easier to get a conviction.

The violence in the Ituri district was a localised ethnic clash over land and resources, one of the myriad of conflicts which spun out of Congo's wider 1998-2003 war that sucked in multiple neighbouring states.

The conflict was not directly related to the current insurgency by M23 rebels in neighbouring North Kivu province, but some of the fighters involved in this latest rebellion were directly involved in the earlier fighting.

M23 leader Bosco Ntaganda is wanted by the ICC over war crimes committed during the Ituri violence.

Prosecutors claimed Ngudjolo directed fighters to block roads to and from the village of Bogoro in February 2003 in order to kill civilians attempting to flee and that civilians, including women and small children, were burned alive inside their homes.

A total of 200 people were killed during and after the attack on the village, when ethnic Lendu and Ngiti fighters allegedly destroyed the homes of the village's mainly Hema inhabitants.

International criminal lawyer Nick Kaufmann said: "It was a very concise incident.

"The prosecution failed to investigate the chain of command adequately as far as the attack in Bogoro is concerned."

ICC judges stressed atrocities had been committed, but said the witnesses prosecutors had chosen to testify to Ngudjolo's involvement were not credible. Presiding judge Bruno Cotte said: "This does not throw into question what befell the people of that area on that day."

Prosecutors will appeal the verdict and, though the court said Ngudjolo should be freed in the meantime, it was not immediately clear whether he could leave the ICC detention facility right away.

He remains under a United Nations travel ban dating from his indictment. Holland, where he has been detained since 2008, is not obliged to take him in from prison. A Congo government spokesman said he saw no reason why Ngudjolo could not go back there, but suggested it may wait until after the appeal.

Géraldine Mattioli-Zeltner, international justice advocacy director at Human Rights Watch, said: "The acquittal of Ngudjolo leaves victims of Bogoro and other massacres by his forces without justice for their suffering."

That decision, which would allow Katanga to be convicted even if he had not committed or ordered war crimes, has been appealed by the defence and by dissenting judge Christine van den Wyngaert, who said the decision would cause Katanga "irreparable prejudice".

Thomas Lubanga, the court's first convict, was sentenced to 14 years in jail earlier this year for his role on another side that participated in the same conflict.