Danish police began a drug crackdown in Christiania in 2004
Residents of Copenhagen's famed Christiania neighbourhood have no right to use the land they have occupied for four decades, a Danish court has ruled.
The 900-odd residents had expected the ruling from the Eastern High Court and planned to appeal, a spokesman said.
The court dismissed a lawsuit by them that they had the right to use the former naval base in the Danish capital even if they did not own it.
Tension has risen in recent years over drug crackdowns and regeneration plans.
Government plans to regain control of the hippy enclave, including demolishing the squats to make way for apartments, prompted a court case in 2006.
Christiania spokesman Thomas Ertman said: "I believe that we will appeal the case."
According to the Copenhagen Post, the residents have permission to remain temporarily and will not be evicted immediately.
The neighbourhood was created in 1971 when hippies squatted at a derelict 18th-Century naval base on state-owned land.
With consent from civic authorities, the squatters were allowed to lead lives free from official interference, as long as they paid their taxes and utility bills.
But in 2004 police cracked down on drug dealers in the area, a move which prompted battles on the streets between riot police and residents.
In 2008, similar scenes erupted over the eviction of squatters.