The House of Lords today ruled that three terror suspects have been denied a ‘fair’ trial because they have not been told about, or allowed to challenge, the secret intelligence evidence against them.

The suspects, who cannot be named, have been subject to control orders for the last three years. The Home Office uses control orders against terror suspects who cannot be tried in open court because the evidence against them comes from intelligence reports which, if disclosed, could endanger national security.

Control orders include the imposition of curfews, electronic tagging and restrictions on movement and association.

Ruling in favour of the men, Lord Phillips of Worth Matravers, the senior law lord on the case, said: ‘A trial procedure can never be considered fair if a party to it is kept in ignorance of the case against him.’

Alan Johnson, the new home secretary, described the decision as ‘disappointing’, but said all control orders would remain in force for now. However, Lord Hoffmann, one of nine law lords who ruled unanimously in favour of the men, warned that the ruling could ‘destroy the system of control orders which is a significant part of this country’s defences against terrorism’.

The suspects’ cases will now return to the High Court. The Home Office must either release more information about the charges against the three men or rescind the orders.

Mohammed Ayub of Bradford firm Chambers Solicitors, who acted for one of the suspects, said his client had been under virtual house arrest for three years on the basis of evidence he has not been permitted to see or challenge. ‘Making such a serious allegation [of terrorism] against a person, but keeping him in the dark as to the evidence, is fundamentally unfair and a denial of the most basic rule of law.’

Michael Smyth, head of public policy at magic circle firm Clifford Chance, which supported civil liberties campaign group Justice in the case, said: ‘It is perhaps a measure of the landmark significance of the case that it was heard by a panel of nine law lords instead of the usual five.’

Eric Metcalfe of expert legal group Justice said the judgment supported the opinion of many senior lawyers.

He told the BBC: ‘The House of Lords judgment marks a turning point. The government can decide to limp on with the use of secret evidence for the sake of ever-diminishing returns.

‘Or parliament can act to end its use once and for all. Either way, the unfairness of secret evidence is clear.’

There are believed to be 17 men currently subject to control orders and 20 deportation cases involving evidence deemed too security sensitive to disclose.