OSSIPEE, N.H. – The state has dropped murder and assault charges against a Maine man who has paranoid schizophrenia.

James Mann, 45, will return to the state prison’s psychiatric unit, where he has spent the last year. He will remain there pending periodic reviews of his condition.

Mann, a handyman from Fryeburg, Maine, was charged with killing 14-year-old Jasmine Steele and shooting her landlord, gravely wounding her, in the small town of Chatham in July 2005.

Lawyers on both sides say Mann has had a lifelong, up-and-down struggle with mental illness. A judge found him mentally incompetent to stand trial last year, and the charges were put on hold to see if doctors could restore him to a mental state where he could be tried.

The effort failed, and Carroll County Superior Court Judge Edward Fitzgerald dismissed the charges Tuesday.

If Mann’s mental health improves, he could be moved to a mental hospital outside the prison walls, authorities say. But lawyers said he is so mentally ill that he could be under lock and key for years.

Senior Assistant Attorney General Jeffery Strelzin did not object to the charges being dismissed. If Mann’s mental health improved enough, he could face criminal charges again.

His lawyer, public defender Jesse Friedman, said Mann is grieving along with the families of both victims.

“This is indicative of the fact that mental illness has gone untreated,” Friedman said. “It is an awful tragedy. There was no reason for Jasmine Steele to lose her life.”

Steele’s family declined to comment Tuesday.

Strelzin said Mann and Linda Miles, who owned the trailer, had had a disagreement the day of the shootings. But Strelzin said nothing she did or said would have been expected to trigger extreme violence.

“It was so irrational,” he said.

Mann was known in Fryeburg as an affable jack-of-all-trades always available to take on odd jobs.