The Court of Appeal overturned a High Court decision that the order imposed on suspect "E" unlawfully deprived him of his liberty, contrary to Article 5 of the European Convention on Human Rights (ECHR).

But the case is now likely to go to the House of Lords, along with other appeals over the "home detention" of suspects without trial.

E was made subject to the order because the Security Service believed he was an internationally-active facilitator and recruiter for an extreme terrorist organisation, the Tunisian Fighting Group, with links to al Qaida and aligned to the concept of "global Jihad".

He has been refused asylum in the UK, but his rights under the ECHR at present protect him from deportation.

Three months ago in the High Court, Mr Justice Beatson held that the Home Secretary's failure sufficiently to consider the prospect of prosecuting E - in which case he could be lawfully detained pending trial - meant that his continuing decision to maintain the draconian control order was "flawed". In law, a control order is only appropriate where the evidence is not sufficient to support a criminal charge.

The judge said Belgian court judgments referring to E's alleged activities had not been considered with a view to prosecution in the UK.

On Thursday, Lords Justices Pill, Wall and Maurice Kay said: "We consider it was wrong to describe the Belgian court judgments as evidence giving rise to a realistic possibility of prosecution."

In any case, it was not the Home Secretary's duty to assume the role of the Crown Prosecution Service or to assume responsibility for every decision taken by that authority.

The order, upheld by the judges today, requires E to live at a particular address and not go out between 7pm and 7am, or to have unapproved prearranged meetings elsewhere. He is also prohibited from having a mobile phone, or equipment capable of connecting with the internet.