Joseph, 23, admitted the manslaughter of Richard Whelan, 28, after he was formally acquitted of murder when two trials failed to produce verdicts.

Mr Whelan was stabbed seven times, including once through the heart, on the top of a double-decker in Holloway, north London, in July 2005.

After the case at the Old Bailey last month, which resulted in Joseph pleading guilty on the grounds of diminished responsibility, it emerged that he should have been in custody at the time.

The Government announced an investigation into "failings" in the justice system which resulted in Mr Whelan's death.

He had been released from a young offenders' institution hours earlier despite an arrest warrant being in force for his arrest on another matter.

Sentencing him to a hospital order without limit of time, Mr Justice Gross said: "The circumstances of this case are tragic indeed.

"They form the nightmare of all those who use public transport."

The judge said Mr Whelan had remonstrated with Joseph when he threw the chips on the top deck of the bus.

He said: "Mr Whelan was not content to stand for this behaviour. His reaction was entirely understandable and, for that matter, praiseworthy. His happy and peaceful night out had been transformed into tragedy."