A high-security prison governor acted reasonably when he tried to prevent a Muslim preacher "radicalising" Muslim inmates, the High Court has ruled.
Two judges said Abu Qatada, 49, was an "iconic figure for jihadists" and moves to halt his possible "malign influence" were justified and proportionate.
The cleric has been dubbed Osama bin Laden's right-hand man in Europe.
He is among six foreign Muslim terror suspects being held in a special unit at Long Lartin prison, Worcestershire.
The detainees - who have not been convicted of any offence - face extradition requests from other countries for alleged terrorist offences, but have launched legal challenges or cannot be deported because of the risk they will be tortured.
Abu Qatada, whose real name is Omar Othman, faces jail in Jordan for terrorism but alleges his conviction was based on evidence extracted by torture.
In the High Court, Lord Justice Aikens, sitting with Mr Justice Openshaw, rejected challenges to a decision - in December 2008 - by Long Lartin governor Ferdie Parker, to change the living conditions for all the detainees after Abu Qatada was moved back to the unit.
The radical cleric had been moved from Belmarsh Prison in south-east London, where he was accused of attempting to "foment trouble" and inciting other prisoners to challenge authority.
On Abu Qatada's return, the six suspects were confined to the unit for all purposes - except for healthcare and family visits - and banned from mixing with other prisoners.
Lord Justice Aikens said the case was not an easy one, but ultimately the court was persuaded the governor's decision was "reasonable".
He said the governor of a high-security prison "must have a wide discretion" with regard to Category A prisoners and those suspected of terrorist acts outside the UK, even if they were not convicted.
Lord Justice Aikens said: "It is clear that he can - and could in December 2008 - exercise a malign influence on other Muslims, including prisoners, and in particular, on impressionable young men, many of whom might be susceptible to his brand of extremism."
John Howell QC, representing the governor and Justice Secretary Jack Straw, had told the judges that action had to be taken to restrict Abu Qatada's influence and prevent others transmitting messages for him.
Claims thrown out
Mr Howell argued it was reasonable, rational and proportionate and the detainees' human rights were being protected.
The six suspects were accommodated in suitably-sized cells and had access to TV, radio, newspapers, books and computers, he said.
They could also pursue hobbies and educational activities within the unit, sit outside in an open courtyard, or use an exercise yard and mini-gym.
The judges rejected claims by human rights lawyers that the "sudden and dramatic" change of regime in 2008 had led to "claustrophobic and depressing" conditions and was disproportionate and unjustified.
Tim Owen QC had argued the unit was so oppressive it violated the "right to private life" under Article 8 of the European Convention on Human Rights, or created a significant risk of violation.
The QC argued that it also breached Article 3 - which prohibits inhuman and degrading treatment - in the case of two of the other suspects, both of whom suffer from mental health problems.