Managers at the Baginton site had appealed against a government decision to refuse planning permission - but all 18 grounds of the appeal were dismissed by the court on Monday.

The ruling raises uncertainty over the airport's plans, as the terminal - designed to handle two million passengers per year, double its current capacity - was seen as integral to its future as a passenger airport.

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Its chief executive Chris Orphanou said: "We are naturally disappointed with the result. We will now take time to examine the full report and its implications."

An airport spokeswoman added that a decision would be made in the next few days over whether the matter would be taken to the Court of Appeal.

This week's ruling has delighted Coun Bertie Mackay (Ind, Stoneleigh), one of the leading campaigners against the development. He said: "I am pleased that the High Court has dismissed this appeal.

"It is too early to say the case is closed, but I am optimistic of a final outcome favouring local residents opposed to the expansion."

The news follows months of falling passenger numbers at the airport, with a 38 per cent year-on-year decline in July, the most recent month for which figures are available.

Thomsonfly, the airport's only passenger airline, announced last week that it is reviewing its operations at the site.

An announcement on the review's findings was due on Friday, but has been delayed until this week.