The beleaguered former manager of America's largest kosher meatpacking plant has been cleared by a jury of employing underage workers.

"These charges were antithetical to everything Sholom Rubashkin is about and the acquittal vindicates him both as a person and as a businessman," said Guy Cook, a member of Mr Rubashkin's defence team. "He is overjoyed."

The acquittal came as a relief to Mr Rubashkin, the former CEO of the Agriprocessors slaughterhouse in Postville, Iowa, who was convicted of 86 counts of bank fraud in November.

He faces up to 25 years in jail at sentencing next week.

Mr Cook said the acquittal gives Mr Rubashkin's attorneys grounds to appeal in the bank fraud case. He accused the judge of unfairly restricting the defence team's ability to present evidence and to cross-examine witnesses.

"We can now make the argument that when a jury was properly instructed and when the evidence was focused on the case at hand, they were able to return a not guilty verdict," Mr Cook said.

Agriprocessors was raided by federal agents in May 2008. Almost 400 illegal immigrants, mainly from Guatemala, were rounded up and deported.

Over the months that followed Mr Rubashkin faced charges of bank fraud, and of employing undocumented and underage workers.

During the child labour trial, the court heard that almost 30 teens, some as young as 13, worked at the plant. They testified that they handled dangerous machinery and chemicals, working up to 80 hours per week.

However, defence attorneys argued that Mr Rubashkin made every effort to screen for underage workers, checking documentation and firing anyone he caught. After the trial, foreman Quentin Hart said the jury doubted the immigrants' stories.

"Each one of them indicated they didn't tell the truth and indicated they knew they had to be over 18 to get a job, so they acquired documentation from somewhere," Mr Hart told AP.

Shmuly Yanklowitz, a kosher food ethics campaigner, said he feared the acquittal gave the impression that Agriprocessors did not break the law.

"It is clear that the company was acting inappropriately and while Sholom should celebrate the acquittal, the broader community should be rigorous in ensuring that we don't let things like this happen again. Illegal labour practices are widespread in Jewish businesses, particularly in the kosher industry."

Federal prosecutors dropped the immigration violation charges that precipitated the initial raid after Mr Rubashkin was found guilty of bank fraud by a South Dakota jury last year. Assistant United States Attorney Bob Teig said it was decided that a further "lengthy and expensive" trial was "not the best use of resources".

Asked whether Mr Rubashkin's acquittal might bolster the belief held by some in the Orthodox community that he is innocent, Mr Teig said: "A jury of 12 people didn't think of him that way and they heard all the evidence. A judge hasn't thought of him that way because he [Mr Rubashkin] has filed motions for acquittal and they've been denied. So people who know the true facts don't think of him that way."

Mr Rubashkin is due to be sentenced on June 22. Mr Cook intends to appeal immediately.