Fifty people exiled from the island of Diego Garcia who arrived at Gatwick on Friday have lost their fight to be housed by the county council.
Diego Garcia became a military base in the 1970s
The group, who hold British passports, had been living in Mauritius since the 1970s when they were exiled by the British to make way for a US air base.
They came to the UK for a better life and the High Court said West Sussex County Council had to house them.
Now the High Court has said the council does not have a duty to pay for them.
'Count the cost'
The county council has already had to support about 200 of the Indian Ocean islanders before the latest arrivals.
A spokeswoman for the council said: "We are very pleased that the judge has agreed that is not the responsibility of West Sussex County Council.
"We have great sympathy for the Diego Garcians because they are in an extremely difficult position.
"But it was the government that moved them from their island in the first place and gave them British passports and we have had to count the cost to the tune of £500,000 so far."
The islanders have been given temporary hotel accommodation
Mr Justice Collins also refused to allow the islanders to seek a judicial review of the council's refusal to house them.
The islanders have been accommodated in hotels in and around Crawley since arriving at Gatwick.
The council said the group would continue to be housed in hotels until Monday when individuals would be assessed to be see if they would need assistance for being sick or vulnerable.
Allen Vincatassin, the group's legal representative, said: "They are coming here to settle in this country as British citizens.
"The government has taken away their homeland, and they are now a very poor community.
"They want help and support as destitute British citizens."
The Diego Garcians have already lost a battle to be compensated for being exiled and for the right to return to their home.
The first group of Diego Garcians to arrive in the UK in 2002 were given help finding homes and jobs but when 30 more arrived in June 2003 the county council refused to help them, only for the High Court to ruled it had to do so.