Infuriating politicians, the Court of Appeal said it was not relevant that terror suspect Abu Qatada was regarded as "extremely dangerous".
Abu Qatada has been described as "a truly dangerous individual", using human rights, he has made a series of challenges against deportation.
Abu Qatada will remain in custody following his arrest for allegedly breaking his bail conditions, a judge ruled.
Home Secretary Theresa May has told MPs that a new treaty signed by the British and Jordanian governments will "finally make possible" the deportation of the radical cleric Abu Qatada.
Qatada, who lives in London, faces terror charges in Jordan.
His legal team claims evidence obtained by torture could be presented in a re-trial.
But Mrs May also warned that even with the treaty, Qatada can still appeal against any new rulings on his extradition.
Conservative MP Mark Reckless has criticised Theresa May’s legal strategy over the attempted deportation of Abu Qatada – but added that she has one more chance to succeed.
He said: “The Home Secretary has pursued throughout the wrong legal strategy, she’s got one last chance and what she needs to do is to put the key constitutional questions to the Supreme Court – who has the last word, Strasbourg or the Supreme Court?
"If she does that, I think she can still win.”
The Court of Appeal turned down May’s attempt to take to the Supreme Court her fight to have Qatada deported and she will now appeal directly to the highest court in the country.
Reckless added: “There is a real chance but she needs a proper point of law to argue…
“She needs to make this big constitutional argument because we can win that.”
Home Secretary Theresa May will make a statement in Parliament tomorrow on preacher Abu Qatada.
The Government was today refused permission to take to the Supreme Court its fight to remove Qatada from the UK.
Shadow Home Secretary Yvette Cooper has criticised Theresa May's efforts to deport Abu Qatada, saying her strategy has "completely failed".
She said: “A year ago Theresa May promised Abu Qatada would soon be on a plane. Now it is clear her legal strategy has completely failed...
“Theresa May failed to appeal against the European Court decision last year. It is no good the Home Secretary blaming the Court when she didn't appeal when she had the chance."
The Government has been refused permission to take its fight to remove preacher Abu Qatada from the UK to the Supreme Court, but the affair is not at an end.
The Home Office will now request permission to appeal directly to the Supreme Court.
Three Supreme Court justices are expected to consider that appeal, which is set to be presented on paper rather than in the form of a full hearing.
The decision could be overturned if the justices are convinced there is a "point of law of general public importance".
The Government could still apply directly to the Supreme Court in a bid to take the case further.
The normal process is to submit a permission to appeal application which would then be considered by three Supreme Court justices.
They would decide whether or not the application raised a point of law of general public importance.
– Home Office spokesperson
We are disappointed with the Court of Appeal's decision but will now request permission to appeal directly from the Supreme Court.
The Government remains committed to deporting this dangerous man and we continue to work with the Jordanians to address the outstanding legal issues preventing deportation.
At the Court of Appeal, lawyers for Home Secretary Theresa May had challenged a ruling made last November by immigration judges on the grounds that Qatada was a "truly dangerous" individual who had escaped deportation through "errors of law".
But three appeal judges said the Special Immigration Appeals Commission (Siac) was entitled to conclude that disputed statements will be used against Qatada.
Qatada, who featured in hate sermons found on videos in the flat of one of the 9/11 bombers, has ultimately thwarted every attempt by the Government to put him on a plane.A resident in the UK since September 1993, he was returned to jail last month after he was arrested for alleged bail breaches.
A hearing over whether he should be granted bail again was due to be held last month, but was delayed.
Police searched Qatada's family home in London before he was held and have since said that he is being investigated over extremist material.
The Home Office today said it will now request permission to appeal against the decision to allow Abu Qatada to remain in the UK directly from the Supreme Court.
There will be an increased police presence at the London Marathon this weekend in the wake of bombings at the Boston event, the Home Secretary told MPs today.
Theresa May said adjustments to security arrangements had been made to this weekend's race after the fatal explosions that tore through spectators watching the race in the US on Monday.
Giving evidence to the Home Affairs Select Committee, Mrs May said, "They've made some adjustments to policing. They've put in some increased policing for the marathon".
"The London Marathon is a regular event, the organisers have a good record in terms of venue security, such as you can for an event that covers 26 miles", she said, adding, "We're very conscious of safety and security needs".