International human rights groups reacted with dismay and called on Parliament to intervene after the High Court rejected claims that the Government is acting unlawfully by failing to suspend the sale of UK arms to Saudi Arabia.
The case was brought by Campaign Against Arms Trade, which says UK fighter jets and bombs sent to the Gulf state have been used in the conflict in Yemen to kill civilians.
Any suspension of arms trading could have had massive implications for thousands of BAE Systems workers in Lancashire.
The company, which makes the Eurofighter Typhoon and Hawk trainer, has multi-billion-pound deals with Saudi Arabia.
Two High Court judges ruled the refusal of the Secretary of State for International Trade to stop the arms selling was not irrational or unlawful.
Amnesty International described the ruling as “a deadly blow to Yemeni civilians”.
Save the Children said the evidence against the arms traders was “overwhelming”.
James Lynch, Amnesty’s head of arms control and human rights, said: “This is a deeply disappointing outcome which gives a green light to the UK authorities – and potentially Saudi Arabia’s other arms suppliers – to continue authorising arms transfers to the kingdom despite the clear risk they will be used to commit violations.”
But a Government spokesman said after the hearing: “We welcome this judgment, which underscores the fact that the UK operates one of the most robust export control regimes in the world.
“We will continue to keep our defence exports under careful review to ensure they meet the rigorous standards of the Consolidated EU and National Arms Export Licensing Criteria.”
A spokesman for defence giant BAE Systems, which has sites at Warton and Samlesbury in Lancashire, said the company would not comment on the case.