The former commanding officer of Royal Marine Sergeant Alexander Blackman has welcomed the decision to grant a fresh appeal in the case.
Blackman, also known as Marine A, is serving a life sentence for murdering a wounded Afghan captive but an independent review concluded he faces the "real possibility" of having his conviction quashed following the presentation of new evidence.
His former commanding officer, Colonel Oliver Lee, who resigned his commission in protest soon after Blackman was sentenced, said he was "extremely pleased" at the latest development in the case and said a "much more balanced and full picture" of the circumstances surrounding the killing needed to be considered.
The Criminal Cases Review Commission (CCRC) has referred the conviction to the Courts Martial Appeal Court.
Blackman was found guilty of murder at a court martial at the Military Court Centre in Bulford, Wiltshire, in 2013.
But the presentation of new evidence relating to Blackman's mental health at the time of the death in Helmand - and the fact that an alternative verdict of unlawful act manslaughter was not available during the trial - means the case will return to the court.
The decision marks the latest step in the fight by Blackman's wife, Claire, to clear her husband's name.
Col Lee said the court martial should have taken greater account of the acute stress Blackman was under at the time.
He said: "I took a view that the proceedings against Sgt Blackman hadn't been balanced and that in order for him to be dealt with justly - I don't seek to condone his behaviour or exonerate him from his responsibilities - but in order for him to be dealt with justly, not leniently, a much more balanced and full picture of the situation in which he found himself needed to be presented to those who were making fundamental decisions surrounding his future."
The former officer told the BBC Radio 4 Today programme: "What should happen to him now - and it's why I'm extremely pleased about the outcome of yesterday's CCRC announcement - is largely ... that his case is considered in the round, in the broadest sense, such that he is dealt with in a fair manner."
Blackman, who was serving with Plymouth-based 42 Commando, quoted Shakespeare as he shot his victim at close range with a 9mm pistol after the Afghan had been seriously injured in an attack by an Apache helicopter.
Footage from another Marine's helmet-mounted camera showed Blackman shooting the Afghan prisoner in the chest.
Blackman was then heard telling him: "There you are. Shuffle off this mortal coil, you c***. It's nothing you wouldn't do to us."
He then turned to comrades and said: "Obviously this doesn't go anywhere, fellas. I just broke the Geneva Convention."
During the trial, Blackman, of Taunton in Somerset, said he believed the victim was already dead and he was taking out his anger on a corpse.
Two other servicemen - known as Marine B and Marine C - were acquitted of murder.