Two judges have rejected Barry George's claim that the Justice Secretary unfairly and unlawfully decided he was "not innocent enough to be compensated".
Lord Justice Beatson and Mr Justice Irwin ruled that the Secretary of State was "entirely justified in the conclusion he reached."
Ian Lawless, who spent eight years behind bars for murder before being freed by the Court of Appeal in 2009, won a similar legal challenge.
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The rapper failed to make it to London in time as he had problems with his passport.
The Home Office was offered the help of specialist social workers in August but rejected it, it has been claimed.
Sunday will be largely dry with some bright spells of sunshine after any mist or fog lifts and clears.