Nepal's Supreme Court has refused to block a controversial law that bans criticism of the king and bars private radio stations from broadcasting news.
Although this is not a final verdict, the ruling clears the way for the government to impose the law.
Critics say the law imposes severe curbs on the press but the authorities say they are not stifling the media.
King Gyanendra assumed direct power in February saying politicians had failed to tackle the nation's Maoist rebels.
Vibrant
A three-member bench headed by Chief Justice Dilip Kumar Poudel refused to defer the law, which also introduces much higher fines for defamation.
"Now street protests are our last resort. The ruling has crushed hopes of the journalists"
Major opposition parties and key donors such as India and the US and international media watchdogs have criticised the law.
The BBC's Sushil Sharma in Kathmandu says Nepal's independent media have been vibrant since the establishment of a multi-party democracy 15 years ago.
But lawyers for media groups who brought the petition to the Supreme Court seeking the deferral now admit defeat.
Ram Krishna Niraula, a lawyer for Kantipur Publications, Nepal largest media group, told Associated Press: "We have lost the case. Though the final decision is yet to come, it has little meaning."
Narayan Wagle, editor the Kantipur newspaper, said: "We have lost our battle in the court. Now street protests are our last resort. The ruling has crushed hopes of the journalists."
Analysts say part of the king's agenda since his takeover has been to crack down on dissent in order, the authorities say, to quell the Maoist insurgency.
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