By Jane Wardell
SYDNEY/CAIRO (Reuters) - Two of three Al Jazeera journalists jailed in Egypt have applied to be deported under a new law after the country's highest court ordered their retrial but did not free them as their families had hoped.
Australian Peter Greste, Canadian-Egyptian Mohamed Fahmy and Egyptian Baher Mohamed were sentenced in June to seven to 10 years in jail for spreading lies to help a "terrorist organisation" - a reference to Egypt's outlawed Muslim Brotherhood.
Egypt's High Court ordered their retrial on Thursday citing procedural flaws in the original trial, which was condemned by human rights groups and Western governments.
The reporters' imprisonment is a thorny issue for Egyptian President Abdel Fattah al-Sisi, who ousted his Islamist predecessor in July 2013 and cracked down on the Brotherhood, as he seeks to prove his commitment to reform.
Their families say they are paying the price for a deterioration in ties between Qatar, which owns Al Jazeera, and Egypt following the Brotherhood's expulsion from power.
Doha supported the Brotherhood during its year in power but a recent Saudi push to heal the rift had raised expectations the reporters would be freed.
The November law allows for foreign convicts or suspects to be transferred to their country to serve their sentences or to be tried there. It was not clear how it might be applied in the Al Jazeera case since it has yet to be used and there are no precedents.
Greste's lawyer Mostafa Nagy told Reuters in Cairo he had presented the prosecution with a deportation request last month but received no response. He planned to make a new request in light of Thursday's ruling and hoped it would be accepted.
Greste's brother, Andrew, echoed those hopes.
"Now that Peter is essentially an innocent man, he's not convicted any more, it does allow for some room to move and for him (Sisi) to step in ... and deport him," he told reporters in Brisbane.
Fahmy's brother Adel also told Reuters in Cairo that his lawyers had formally asked Egypt's presidency and prosecution that he be pardoned or deported.
Despite widespread criticism of the case, Sisi has resisted intervening directly, citing judicial independence.
Defence lawyers say the retrial could begin within a month. The judge has the power to release all three on bail at the first hearing.
Australian Foreign Minister Julie Bishop said: "There are more avenues...for Peter Greste, his family and his legal team to pursue."
(Additional reporting and writing by Lin Noueihed, Editing by Ralph Boulton)