An Israeli court ruling that former Melbourne school principal Malka Leifer, who is accused of child sex crimes, could be freed from custody into home detention has angered her alleged victims.

Dassi Erlich, who has accused Leifer of abusing her, told AAP on Wednesday night she was “absolutely outraged” at the ruling as relayed to her by friends in the courtroom in Jerusalem.

Victorian police are seeking Leifer’s extradition to Australia on 74 charges of child sexual abuse.

“The judge has ordered she be released on bail at 10am on Friday morning and at this moment the judge’s order has absolutely no restrictions on her freedom. Nothing,” Ms Erlich said in Melbourne.

She said Leifer’s lawyer, Yehuda Fried, brought in Rabbi Yitzchak Dovid Grossman who said he would take care of the former educator.

“The rabbi who is guaranteeing he will take care of her, he has said in court that it is humiliating for her to be held under custody,” she said.

“We now understand that the prosecutors are going to appeal this decision but at the moment the judge’s standing rules that she will be let out on bail.

“If this bail is upheld and the prosecutor loses the appeal on this, there are absolutely no restrictions on her movements. She is free to do whatever she pleases,” Ms Erlich said..

“So basically we are back to square one.”

Ms Erlich said the greatest fear was that Leifer would reoffend and continue to evade justice.

“We are close to losing hope, we will never give up.”

The 54-year-old former principal has been in custody since February 12 after Israeli police rearrested her, accusing her of faking mental illness to avoid extradition to Australia.

Jewish community leader Manny Waks, an advocate for Kol v’Oz, a Jewish organisation combatting child sex abuse, said it was “outrageous” that Leifer had been allowed to “continue her charade”.

“It seems, once again, that Leifer’s interests have been placed well ahead of her alleged victims,” he said in an email to AAP.

A spokesman for federal Attorney-General Christian Porter told AAP on Wednesday night: “These are matters for the local courts.”

-AAP