Three Court of Appeal judges ruled that European regulations do not include strict Italian rules on slicing and packaging.

Therefore, they said, Parma ham produced in the UK did not have to comply with Italian slicing standards.

The judges dismissed the appeal by the powerful Parma ham trade association, Consorzio del Prosciutto di Parma.

Judges say ham can be sliced in the UK

The producers were angry that Asda packs the meat in the UK, contravening Italian law which says it must be packed within the Parma region.

The Consorzio was seeking an injunction enforcing the Italian rules which say all Parma ham must be prepared for sale in its home region in north-east Italy.

The High Court had already thrown out the Italian ham producers' case against Asda Stores, and its slicers and packers, Hygrade Foods Ltd, of Corsham, Wiltshire in January.

But the Italians were given leave to appeal.

Asda, which says its ham is up to 61% cheaper than its competition, celebrated its win by setting up a Parma ham stall on the pavement outside London's Law Courts.

A placard by the stall described the case as "The Barmy Parma Drama".

The so-called "Parma drama" is just one in a series of legal wrangles involving food sold under the name of an area or region which specialises in producing it.

Any cheese can carry the name of Cheddar

European laws protect the names of certain famous products such as Champagne, a title that can only refer to sparkling wine from the renowned French province.

But others, such as Cheddar cheese, have become so widely used that the EU says it cannot stop producers across the globe using them.

However, while any cheese can carry the name of the Somerset village the words West Country Farmhouse Cheddar are restricted under the EU's Protected Designation of Origin regulations.

The same rules have prevented British producers such as Yorkshire farmer Judy Bell from selling "Feta" cheese. EU regulation 2081/92 says the term can only be applied to sheep or goats' milk churned in Greece.

An appeal against the ruling should be settled later this month but meanwhile Mrs Bell has also been stopped from calling her product Yorkshire Fetta or Pheta in a bid to escape the ban.

Stilton, Swaledale and Single Gloucester are also protected by the eclectic EU list - but Double Gloucester is not included.

Brewers are prevented from cashing in on the names of traditional regional brews such as Newcastle Brown Ale, Kentish Ale and Rutland Bitter.

But wrangling over contents of the list continues and British officials recently saw off a French bid to end restrictions on the use of the words Cornish clotted cream.