The high-profile UFO hacker, who allegedly caused several hundred thousand pounds worth of damage to US computer systems when he gained access to various systems, suffers from Asperger's Syndrome, a mild form of autism.
The 43-year-old McKinnon is alleged to have gained unauthorised access to the Pentagon's military networks in a bid to discover evidence of the existence of alien life and UFOs.
McKinnon's lawyers argued that extraditing their client would lead to "disastrous consequences" for his health, including possible psychosis and suicide.
McKinnon, from Wood Green, London, was seeking to overturn a UK Home Office decision allowing his extradition to go ahead.
He also challenged a refusal by Keir Starmer QC, the Director of Public Prosecutions, to put him on trial in the UK on charges of computer misuse.
However, the courts have effectively rejected his claim under Article Eight of the European Convention of Human Rights that extradition would breach his right to a private and family life.
In September, a cross-party group of senior MPs - David Davis, Chris Huhne and Michael Meacher - were unable to convince Home Secretary Alan Johnson of the need to re-examine the case for extradition of McKinnon.
In a press statement, the Home Office said that no further comment would be made while McKinnon continued to pursue the legal avenues available to him.
The BBC quoted McKinnon's mother Janis Sharp as saying that no other country would offer its citizens to the US so readily as sacrificial lambs just to safeguard the special political relationship.
She told the BBC: "To use my desperately vulnerable son in this way is despicable, immoral and devoid of humanity".
McKinnon's solicitor, Karen Todner, meanwhile, said the effect the proceedings and impending extradition were having on McKinnon were devastating.
"Why is our government so inhumane as to allow this to happen to someone, particularly someone with Asperger's, a form of autism?", she said in a statement.
"This is the wholesale destruction and bullying of a small individual by the United States and now our own government.
"Our extradition treaty with the US is unfair and prejudicial to UK citizens and should be repealed or amended immediately."
Infosecurity understands that McKinnon still has a few legal options available to him, including the possibility of plea bargain with US prosecutors.
One senior legal professional who spoke to Infosecurity on a no-names basis, indicated that there is now a strong likelihood that McKinnon will be extradited to the US and the claims that he caused damage costing £700 000 to remediate will be proven.
"The US authorities will claim in court that McKinnon deleted critical files from operating systems, which shut down the US Army's Military District of Washington network of 2000 computers for 24 hours", he said.
"In addition, he will also be shown to have deleted US Navy Weapons logs, rendering a naval base's network of 300 computers inoperable after the 09/11 terrorist attacks."
The legal professional said that the most interesting aspect of the case is that, when David Pannick QC defended McKinnon in the House of Lords in June of last year, he indicated that discussions with prosecutors revealed that the UFO hacker faced eight to 10 years in jail if he contested the seven charges against him.
"This term", said Mr Pannick, "would be reduced to 37-46 months if he co-operated and allowed his extradition to go head without challenge".
"We are also led to understand that McKinnon was offered to option to serve out his sentence in the UK in the case, but any possible agreement was rejected on the grounds of the fact that no guarantees were available."