Luke Anthony Welford has pleaded not guilty to being an accessory after the fact of the alleged stabbing murder of 33-year-old Michael Black at Parklea Correctional Centre on April 22, 2020.

Alongside Matthew Ronald Bennis, Welford is accused of receiving, harbouring, maintaining and assisting Emmett Raymond Sheard, who has pleaded not guilty to murder over the killing.

The trio will stand trial on June 6 next year.

In the NSW Supreme Court on Tuesday, Welford's lawyers argued he should be granted bail as he had made significant progress towards addressing his drug addiction.

For almost a year Welford has been receiving long-acting injections to treat his drug dependence.

"It's helped me heaps, I'm honestly changed," Welford told the court from a prison in Bathurst.

When handing down his decision, Justice Robert Allan Hulme noted he had refused bail for Welford before.

Welford had been in custody almost entirely for the past 20 years of his life, and had not been able to demonstrate he could deal with one of the primary underlying causes of his offending, substance abuse, he said.

"(But) Mr Welford has said in the course of the hearing today that he feels confident that these injections have gone a long way towards overcoming the desire he has to use illicit drugs.

"I hope he is correct about that."

Justice Hulme granted Welford bail, but imposed a series of strict conditions on him.

He will essentially live under house arrest at a home in Bowral, and will be unable to leave the property without either one of his parents.

"That's a harsh condition to impose but I think it is necessary at least in the initial phase of Mr Welford being returned to the community," Justice Hulme said.

Welford must also report to police daily, abstain from alcohol and drugs, and must continue to receive the buprenorphine injections to manage his drug addiction.

Australian Associated Press