Alan Johnson said he had considered demands for him to intervene in the case but had decided that the extradition would not breach Mr McKinnon’s human rights.
“As the courts have affirmed, I have no general discretion,” he said in a statement.
“If Mr McKinnon’s human rights would be breached, I must stop the extradition. If they would not be breached, the extradition must go ahead.”
Mr McKinnon’s mother, Janis Sharp, said Mr Johnson and the Government “should hang their heads in shame”.
“To force a peaceful, vulnerable, misguided UFO fanatic like Gary thousands of miles away from his much-needed support network is barbaric,” she said.
“This is a cruel and miserable decision.
“If the severity of Gary’s medical condition isn’t sufficient to prevent his extradition, I can’t imagine what is. God help others facing a similar fate.
“I’m so upset and angry.
“Where are the ‘very real safeguards’ that the Government consistently hid behind when forcing this appalling Act through Parliament.
“The only people who won’t get extradited are terrorists facing the death sentence, the very people the Act was meant to be about.
“What bitter irony.”
Ms Sharp said her legal team would now apply for a judicial review, but if that was not granted then her son could be extradited before Christmas.
“What a heartless and cowardly decision this is,” she said.
Mr McKinnon, who has Asperger’s syndrome, was given hope last month when the Home Secretary agreed to study new medical evidence before deciding on his extradition to the US.
Mr Johnson’s deliberations came after the High Court refused the 43-year-old permission to appeal to the Supreme Court against his removal to America.
Mr McKinnon, from Wood Green in north London, is accused of breaking into the Pentagon’s computer system but says he was just seeking UFO evidence.
But Mr Johnson said: “I have carefully considered the representations in the case of Gary McKinnon.
“I am clear that the information is not materially different from that placed before the High Court earlier this year and does not demonstrate that sending Mr McKinnon to the United States would breach his human rights.”
Mr McKinnon’s family say that his health has deteriorated significantly under the pressure of the pending extradition and fears about how he will be treated by the US authorities.
The Home Secretary went on to say in his statement that there had been a number of assurances made about what would happen with him in America.
“Firstly, due to legitimate concerns over Mr McKinnon’s health, we have sought and received assurances from the United States authorities that his needs will be met,” he said.
“These were before the High Court in July.
“It is also clear from the proceedings to date that Mr McKinnon will not, if convicted, serve any of his sentence in a supermax prison.
“Finally, should Mr McKinnon be extradited, charged and convicted in the US and seek repatriation to the UK to serve a custodial sentence, the Government will, of course, progress his application at the very earliest opportunity.”
Mr McKinnon faces up to 60 years in jail for allegedly hacking into 97 US military and Nasa computers, causing damage which the US government claims will cost more than 700,000 dollars to repair.
His case has intensified criticism of the extradition treaty between the US and the UK which, critics claim, fails to give British citizens adequate protection.
David Burrowes, Mr McKinnon’s local Enfield Southgate MP and a shadow justice minister, said the Home Secretary’s decision was “deeply disappointing”.
“The Home Secretary had the opportunity to stop the extradition based on the substantial medical grounds that it put Gary McKinnon’s life at risk and that it breached his human rights.
“It’s a great shame that he’s also dismissed all the calls for justice in this country for Gary McKinnon.”
He added: “The Home Secretary’s washed his hands of him.”
Mr McKinnon’s lawyer, Karen Todner, said: “It’s a devastating blow but we are not going to give up.
“We are certainly coming to the end of the road.
“We’re just hoping at some point someone sees sense and steps in.
“All the legal team do know is we cannot give up because in some ways it’s like dealing with a Death Row case, and we genuinely believe that Gary’s life is at stake here.”
She added that she planned to issue judicial review proceedings next week, but added: “We are normally allowed three months to issue but the Home Secretary has only allowed us seven days.”
Liberal Democrat home affairs spokesman Chris Huhne said: “It is appalling that this Government places a higher value on a deeply unfair extradition agreement than it does on the welfare of a British citizen.
“Alan Johnson has shamefully turned down the opportunity to demonstrate his faith in British justice and save a vulnerable man from a lifetime in prison or worse.
“The Home Secretary must now step in and ensure that this sorry saga is ended once and for all by trying Gary McKinnon in this country.
“The Home Secretary should stop being an American poodle and start being a British bulldog.”
Labour peer Lord Morris of Manchester, who was Britain first Minister for the Disabled, said: "This is an appalling tragedy. The approach of the United States authorities betrays a deeply disturbing unawareness of Mr McKinnon's very severe disability.
"I profoundly hope the outcome of any judicial review will be more humane than that of the authorities."
Shami Chakrabarti, director of Liberty, said: "A government can't tie its own hands and then protest that its hands are tied.
"The shoddy treatment of this vulnerable man should demonstrate that our rotten extradition laws need urgent reform."
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