City Labour leader Joe Anderson said: "I have no doubt in my mind that this is a positive development.
"The courts over there have not looked at all the available evidence yet and this must be put right at the appeal. There has to be a re-trial which involves Graham Sankey being interviewed.
"I'm hopeful that the British government continue to monitor this and continue to work with their Bulgarian counterparts."
Michael, 19, was on holiday in the Golden Sands resort with pals after watching Liverpool's European cup final victory in Istanbul.
He has already lost one appeal after the court refused to accept new evidence.
Michael's family have also managed to get visas to Bulgaria so he never goes a week without seeing one of them. Members of the family have been making the journey to Varna jail every week since Michael's arrest.
