Shareholders from Northern Rock protested outside the High Court
Former Northern Rock shareholders have lost their legal challenge to the government's plan to compensate them.
In the High Court last month they argued the government had deliberately undervalued the bank in the run up to its nationalisation last year.
This had infringed their human rights, they argued, and meant they would now receive nothing.
A firm of accountants is assessing how much the shares were worth and how much compensation should now be paid.
"We have come to the conclusion that the provisions made for the compensation of the shareholders of Northern Rock do not infringe their rights," said Lord Justice Stanley Burnton, one of the two judges hearing the judicial review.
The Northern Rock collapsed at the start of the international credit crunch in the autumn of 2007 after savers staged a nationwide run on the bank after it had sought financial aid from the government.
Roger Lawson, Shareholders Association: 'There's a good chance that we will appeal'
Subsequently it had to be bailed out fully by the government, which then went on to nationalise the bank in February 2008.
At the time of nationalisation the government said that any subsequent valuation for compensation purposes should be based on the assumption that the Northern Rock had not been a going concern.
"I am disappointed for the nearly 200,000 shareholders affected," said Dennis Grainger of the Northern Rock Shareholders Action Group, "but it wasn't a complete surprise, we were warned that judicial reviews rarely succeed."
However he said his group would now consider taking the issue to the Court of Appeal after the judges granted permission to do so.
The valuation of the now defunct shares is being carried out by accountancy firm BDO Stoy Hayward.
A Treasury spokesman welcomed the judgement.
But the Liberal Democrat economics spokesman Vince Cable was scathing about the motives of some of the shareholders.
"The two hedge funds who brought this case to the High Court deserve to lose their shirts," he said.
"They bought Northern Rock shares on the cheap soon after the run on the bank in the hope of making a quick buck.
"We should not reward such cynical and reckless speculation."
The judicial review was brought by two substantial shareholders in Northern Rock - the hedge funds SRM and RAB - along with the Northern Rock Shareholders Action Group, and the Legal & General insurance company.
We don't accept that the state can confiscate one's property without compensation
Roger Lawson, UK Shareholders' Association
They argued in court that the government's assessment of the bank's true worth was false, and almost guaranteed that they would end up with nothing.
Roger Lawson, of the UK Shareholders' Association, told the BBC: "We accept many risks when we invest in shares… but we don't accept that the state can confiscate one's property without compensation."
Government barristers pointed out the lender had been lent or guaranteed £54bn of taxpayers money to keep the bank going, and that without this support the bank would have gone bust, leaving the shares totally worthless.
The judges said they were sympathetic to the losses of the shareholders, but said they had taken a commercial risk with their investment.
"They entrusted their investment to the hands of the management of the company," said the judges.
"As it turned out, their business plan was flawed and could not survive the unprecedented circumstances of the latter part of 2007.
"In our judgment ... none of the former shareholders has any justifiable claim against the defendant (the Treasury) beyond their entitlement under the compensation scheme," they added.
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