A coroner in Germany ruled that Jeremiah Duggan, 22, had committed suicide by running on to a road where he was hit by fast-moving cars in 2003.
A High Court judge in London yesterday said that evidence of "foul play" must be investigated after new details suggested the crash was faked and he might have been killed.
The court was told that Mr Duggan, from north London, had attended a youth event organised by the far-Right, "cult like" LaRouche group before his death.
Mr Duggan, who was studying at the British Institute and the Sorbonne in Paris, had believed he was attending a conference about the problems in Iraq.
Lord Justice Elias said his death, which was thought to have occurred on a highway near Wiesbaden, might have happened elsewhere and could have been "stage managed" to look like a road accident.
One member of the LaRouche group allegedly told his mother: "We have hunted him down ... it is right that he is dead, he is a traitor and a spy."
The judge ruled that potentially crucial evidence was not available at the first inquest held in 2003 by Dr William Dolman, the north London coroner. Dr Dolman concluded in a narrative verdict that Mr Duggan "received fatal head injuries when he ran into the road" after phone calls home disclosed that he was "in a state of terror".
Quashing that inquest, Lord Justice Elias said: "It is sufficient that fresh evidence here could alter the verdict, and in any event it is very much in the interests of justice that it should be carefully considered and analysed in a fresh inquest.
"It puts in issue whether or not there may have been foul play. It is necessary that this fresh inquest is held. We are not saying what the outcome of that inquest will be."
The decision was welcomed by Erica Duggan, Jeremiah's mother, who has long fought for a new hearing. She hopes it will lead to the German authorities reopening their investigations into her son's death.
She said: "No country has investigated my son's death properly as yet. The German state has failed us. The British state has an obligation to establish how Jeremiah died."
Lawyers for Mrs Duggan described the LaRouche group as "a cult-like organisation which Mrs Duggan now knows espouses a fascist and anti-Semitic ideology and is headed by Lyndon LaRouche, a convicted fraudster".
The new inquest will be before a different coroner.
