Coroner rules 7 July evidence 'must be heard in public'
Home Secretary Theresa May has lost a legal bid to force the 7 July inquests to hear top-secret evidence behind closed doors.
Earlier this month, coroner Lady Justice Hallett rejected pleas to exclude victims' relatives from hearings relating to MI5's knowledge of the bombers before the attacks.
Two Appeal Court judges sitting in the High Court have now upheld that ruling.
The government said it would "consider the judgement carefully".
Fifty-two people died in suicide attacks on three London Underground trains and a bus in July 2005.
The BBC's June Kelly said the evidence in question was related to the issue of whether the bombings could have been prevented.
Relatives of those killed want to ask security officials why two of the bombers - Mohammed Sidique Khan and Shehzad Tanweer - were not pursued more aggressively by MI5 after they were observed meeting known terror suspects 17 months before 7/7.
Our correspondent said some of the families were adamant that those questions must be asked in public.
But MI5 has argued that would be both unnecessary and impossible because it would require the disclosure of top-secret files.
Lady Justice Hallett, in her ruling on 3 November, concluded that while she had the power to exclude the public from certain hearings in the interests of national security, that did not include "interested persons", such as the bereaved relatives, who were legally entitled to be represented at the inquests.
She said she hoped that "with full co-operation on all sides" - and by redacting certain details where necessary - most if not all of the relevant material could be heard without threatening national security.
Speaking on behalf of the families calling for a public hearing, solicitor Clifford Tibber said: "It is difficult to understand what information, six years on, is so sensitive and so critical that it cannot be made available to the families in some form.
"As we have said many times, our clients just want the Security Service to produce all of the evidence so that the bereaved and the public can learn the truth about what happened, whether lessons have been learned and implemented and whether the bombings could have been prevented."
It is not yet clear whether the home secretary will appeal against the High Court's decision.
She could also use powers to transform part of the inquests into a public inquiry, which could then examine documents in closed hearings.
A Home Office spokesman said the government was "committed to co-operating fully with the coroner's inquiry".
"Along with many victims' families, we believe a closed hearing for a small part of the July 7 inquests would be the best way for the coroner to consider as much information as possible," he said.
"The court has decided this is not possible and we will consider the judgment carefully."
'Rule of law'
Human rights group Liberty called the High Court ruling a "milestone for open justice".
"The whole point of an inquest is that those most affected by untimely death should have some answers to why it happened and reassurance that lessons will be learned for the future," legal officer Corinna Ferguson said.
"A secret inquest would have been a contradiction in terms.
"No-one doubts that the security agencies do vital and sensitive work, but they also need to respect the ultimate role of the courts in upholding the rule of law."