Treasury restrictions on State handouts to the wives of terrorist suspects are illegal, European judges ruled today.
The decision may force the Government to change anti-terrorism rules following a legal case brought by three women whose husbands appear on a list of people said to have links with al Qaida, the Taliban and Osama bin Laden.
People on the list, drawn up by a UN sanctions committee, have their funds and other assets frozen, in a bid to cut off terrorist funding.
The EU enforces the measure via rules stating that no funds 'shall be made available, directly or indirectly, to, or for the benefit of' people named on the list, unless authorised to cover 'basic expenses'.
But the spouses of three suspects on the list went to court to challenge the Treasury's decision to impose tough restrictions on access to social security payments worth several hundred pounds a week, including income support, child benefit and housing assistance.
Under the Treasury rules, such benefits must be paid into a bank account, and the spouse can draw only up to £10 in cash for each member of her household. All other payments from the account must be made by debit card.
The spouses, all living in the UK with their husbands and children, must also submit a monthly account to the Treasury detailing all spending, with receipts for any goods bought and copies of bank statements allowing Treasury officials to check that the purchases do not exceed 'basic expenses'.
A UK legal challenge that the payments should not be subject to such conditions was thrown out by the High Court, but the European Court of Justice today declared:'The freezing of funds of persons with suspected links to bin Laden, al Qaida or the Taliban does not apply to certain social security benefits paid to their spouses.
'The regulation ordering funds to be frozen applies only to assets that can be used to support terrorist activities.