In what has been hailed as its most important judgement of recent years, the House of Lords yesterday ruled that the detention of foreign terrorist suspects without trial breaks human rights laws. Nick Morrison looks at how the Government's anti-terror policy has been left in tatters.

HOWEVER reluctantly he was prised from his post, it seems that David Blunkett's timing could hardly have been better. Had he clung on another day, he would have faced such humiliation that, even without the affair of his ex-lover's nanny's visa, his position would have been looking shaky.

For yesterday, the highest court in the land blew an enormous hole in the Government's anti-terror policy, of which the former Home Secretary was the chief architect. Emergency legislation brought in amid Government scaremongering in the wake of the September 11 attacks has been found to be in breach of human rights, and, just as damningly, has carried with it the whiff of racism.

Now it has been left to Mr Blunkett's successor, Charles Clarke, to pick up the pieces, and to reconstruct a coherent policy to fight terrorism, this time within the law.

But as well as questions over the Government's apparent disregard of the fundamental right to a free trial, the issue has also highlighted the problem of how to fight terrorism in a democracy within the rule of law, and of how to prosecute suspects when much of the evidence against them has been gathered through covert means.

So what was the judgement, what does it mean and where does the Government go from here?

Q What was yesterday's case about?

A It had been brought by nine detainees, among the 17 people held under the Anti-Terrorism, Crime and Security Act (ATCSA), introduced following the September 11 attacks. Although eight of the detainees have subsequently been released, nine are still being held, including some of those involved in the case.

ATCSA gives the Home Secretary power to detain a foreign terrorist suspect without charge, if they cannot be deported. Most of them are being held at Belmarsh Prison in south London, which has been compared to Guantanamo Bay, the US base in Cuba where suspected members of al Qaida and foreign nationals captured in Afghanistan have been held, and which has been criticised for its human rights abuses.

The detainees, the bulk of whom are from North Africa and the Middle East, took the case to the House of Lords after the Court of Appeal backed the Home Office's powers to hold them indefinitely without charge.

Q What did the House of Lords decide?

A The Law Lords, the UK's highest court, ruled that detaining foreign terrorist suspects without a trial was in breach of European human rights laws. The nine law lords who heard the case, instead of the usual five because of its constitutional importance, decided by a majority of eight to one in favour of an appeal by the nine detainees.

Lord Bingham, a senior law lord, said this power was incompatible with the European Convention of Human Rights, by allowing detentions "in a way that discriminates on the ground of nationality or immigration status", by applying to foreign nationals but not to Britons. In his ruling, Lord Nicholls of Birkenhead said: "Indefinite imprisonment without charge or trial is anathema in any country which observes the rule of law."

Q What was the Government's case?

A The argument put forward by Attorney General Lord Goldsmith was that the terrorist threat post-September 11 justified exceptional measures, including opting out of the part of the European Convention on Human Rights relating to the right to a fair trial, and that ATCSA provided the means to ensure detainees were being held legally even when there was no trial.

Detention was an alternative to deportation, but the detainees cannot be deported if they could face persecution in their homeland, and unless a third country is willing to take them, the Government claims it had no alternative but to detain them.

Q What is the evidence against them?

A This is one of the most controversial aspects of the case, since neither the detainees or their lawyers have a right to see the evidence. The Government argues that some of the evidence is of such a sensitive nature, that to disclose it would be to endanger lives or put ongoing anti-terrorism operations at risk, but the detainees are then left with the problem of how can they defend themselves when they are not told of the allegations against them.

Under ATCSA, lawyers who have been security-vetted are allowed to see the evidence, and can then argue against the Government's case, but they are not allowed to discuss this evidence with the suspect.

One of the detainees, known as D, who had been arrested in December 2001, was released in September this year, but the Home Office refused to explain why he was no longer considered a threat.

Another detainee, E, claims evidence against him is unreliable because it was obtained by the torture of others abroad. The Government's position is that although evidence obtained under torture in Britain would be inadmissible in court, evidence obtained under torture abroad can justify detention.

Q What has been the effect of their detention on these men?

A Lawyers for the detainees claim their ordeal has caused mental health problems, with two of them now being held at Broadmoor. One of the detainees, known as G, was released on bail earlier this year after the Home Office accepted he was mentally ill, although he is now being held under effective house arrest.

Q What happens now?

A When the US Supreme Court made a similar ruling, it meant the Guantanamo Bay captives could automatically challenge their detention in the courts, but the House of Lords does not have the same position in the UK. Instead, the Government has the option of taking its case to Parliament a second time, or drawing up new legislation putting foreign-born suspects on the same footing as British citizens, allowing them to be tried on terror charges.

Lawyers for the detainees have called for them to be released and the provisions of ATCSA under which they have been held to be scrapped, and that if there is no swift action by the Government they will then call for the European Court of Human Rights to get involved.

But new Home Secretary Charles Clarke yesterday indicated he would be asking Parliament to renew the legislation, and would look at modifying the law to address the concerns raised by the House of Lords.

Q What about the detainees?

A Mr Clarke said yesterday that they would remain in prison until the law was reviewed, but one option in the longer term would be to release them subject to a form of house arrest, although this could also be subject to a legal challenge. Another possibility would be to renew the search to find a country willing to take the detainees, but this may prove to be a faint hope.

For the Government, the fate of these detainees has become a major headache, and with it the future of its anti-terrorism policy. For if the Government is unable to defeat terrorism without resorting to breaching human rights, it calls into question its moral superiority over the very regimes it condemns, and those it considers to be fair game for removal.