Nepalese officials discovered Ryan Sean Davy in his hideaway after he had already climbed more than 6 100 metres.
He was ordered off the mountain, had his passport confiscated and will be fined £17 000 (almost R300 000), an official said.
Foreigners have to pay the Nepal government £8 500 for permission to climb the 8 848m peak – a major currency earner for the impoverished country.
Gyanendra Shrestha, a government liaison officer at the mountain’s base camp, said: “I followed him with my friend and found him hiding in a cave nearby. He had set up camp in an isolated place to avoid government officials.”
Davy could be banned from Nepal for five years or face a 10-year ban on climbing in the country. He told officials he didn’t have enough money for a flight to Kathmandu to reclaim his passport.
On Monday Davy explained himself in a Facebook post: "I was ashamed that I couldn't afford the permit after all the help, preparation and what everybody had done for me during my training, it would have been a total embarrassment to turn around and accept defeat because of a piece of paper. So I took a chance and spent the little money I had on more gear to climb and practice on the surrounding peaks for acclimatizing in preparing for a stealth entry onto Everest."