Christopher Lowcock, 29, wrapped his prosthetic limb in a bandage and fooled G4S staff who failed to carry out the proper tests when they set up the tag and monitoring equipment at his Rochdale home.
Lowcock could then simply remove his leg - and the tag - whenever he wanted to breach his court-imposed curfew for driving and drug offences, as well as possession of an offensive weapon.
A second G4S officer who went to check the monitoring equipment also failed to carry out the proper test.
Managers became suspicious last month, but when they returned to the address a third time Lowcock had already been arrested and was back in custody accused of driving while banned and without insurance.
A G4S spokeswoman said: ''G4S tags 70,000 subjects a year on behalf of the Ministry of Justice.
''Given the critical nature of this service we have very strict procedures in place which all of our staff must follow. ''In this individual's case two employees failed to adhere to the correct procedures when installing the tag. Had they done so, they would have identified his prosthetic leg.
''Failure to follow procedure is a serious disciplinary offence, and the two employees responsible for the installation of the tag have now been dismissed.''
A Ministry of Justice spokesman added: ''We expect the highest level of professionalism from all our contractors, and there are strict guidelines which must be followed when tagging offenders.
''Procedures were clearly not followed in this case and G4S have taken action against the staff involved.
''Two thousand offenders are tagged every week and incidents like this are very rare.''
As well as the electronic tagging of offenders, G4S also runs private prisons including Altcourse, in Liverpool; Parc, in Bridgend, south Wales; Rye Hill, in Willoughby, near Rugby; and Wolds, in Brough, East Yorkshire.
It will also run Birmingham Prison when it becomes the first to be transferred from the public to private sector in October.
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