BBC correspondent David Sillito: decision has sparked new concern among organic farmers

The farmer, Guy Watson, launched the first legal challenge of its kind against the government's decision to allow the trials to go ahead.

Earlier this month, it was turned down by a High Court judge who ruled that his case was "unarguable", and the court of appeal has backed that judgement.

Lord Justice Simon Brown, sitting with Lord Justice Judge and Lord Justice Buxton, ruled that the the Environment Minister, Michael Meacher, should not have given approval for the crop trials to go ahead.

But the judges concluded that the courts had no jurisdiction to intervene. Lord Justice Buxton said in his written judgement that the grounds of Mr Watson's appeal were "fundamentally misconceived".

Modified maize was sown in May in a field belonging to the National Institute for Agriculture Botany next to Mr Watson's organic farm in Buckfastleigh, near Totnes, Devon.

Guy Watson: fears his farm will no longer be organic

Mr Watson said there was a risk of cross-pollination between the maize and his own crops, which could mean he can no longer call his produce "organic".

The High Court's justice said in the earlier judgement that the risk was "likely to be zero".

Government advisers had said that there would be no risk as long as there was at least 200 metres between the two crops.

Environmentalists, fighting the introduction of what they call "Frankenstein food", reacted with dismay to the "disastrous" decision.

Both Friends of the Earth and the Soil Association, which grants organic status to farmers, backed Mr Watson's application for permission to seek a judicial review on the grounds that the controversial seed trials were being carried out in disregard of the law.

Mr Watson, who estimates he could lose £20,000 as a result, said: "One of the very firm rules of organic farming is that no product can contain any genetically-modified material whatsoever."

But Dr Thomas Jolliffe of seed manufacturers Advanta Holdings UK Ltd said that there was no risk attached to the experiments.

"There are no risks perceived with this genetically engineered maize," he said.