In a major blow for Britain’s government, the High Court has ruled that the prime minister can’t trigger the UK’s exit from the European Union without approval from Parliament.
The government will appeal the ruling to the Supreme Court, with the hearing to take place in December.
Deutsche Bank says the ruling has weakened the government and is likely to mean a UK general election in 2017.
Several claimants challenged plans for Brexit in a case with major constitutional implications, hinging on the balance of power between Parliament and the government.
Prime Minister Theresa May has said she will launch exit negotiations with the EU by March 31. She is relying on a power called the royal prerogative that lets the government withdraw from international treaties.
Claimants argue that leaving the EU will remove rights, including free movement within the bloc, and say that can’t be done without Parliament’s approval.
Three senior judges ruled that “the government does not have the power under the Crown’s prerogative” to start EU exit talks.
The case is considered the most important constitutional matter in a generation.
Underscoring the importance of the case, May put Attorney General Jeremy Wright in charge of the legal team fighting the claim.
Wright argued that the lawsuit is an attempt to put a legal obstacle in the way of enacting the result of the June 23 referendum to leave the EU.
May wants to use royal prerogative, historic powers officially held by the queen, to trigger Article 50 of the EU’s treaty, which starts two years of talks before Britain’s departure from the EU.
The powers, which have in reality passed to politicians, enable decisions to be made without a vote of Parliament and cover matters as grave as declaring war or as basic as issuing passports.
Historically, royal prerogative has also applied to foreign affairs and the negotiation of treaties.
The British government was disappointed with the decision, trade minister Liam Fox said.
“The government is disappointed by the court’s judgement. The country voted to leave the European Union in a referendum approved by acts of parliament. The government is determined to respect the result of the referendum,” Fox told parliament.
“This judgment raises important and complex matter of law and it is right that we consider it carefully before deciding how to proceed.”
The pound rose sharply following the High Court decision. The ruling saw sterling shoot past $US1.24, up nearly 1 per cent on the day.
Neil Wilson, markets analyst at ETX Capital, said: “Most MPs are natural Remainers, although they would face intense pressure from constituents to deliver the referendum mandate.”
The British government said it would appeal the ruling. The ruling was welcomed by opponents of a “hard Brexit”.
Liberal Democrat leader Tim Farron said the Govenrment must now lay out its negotiating position in Parliament, while Scottish First Minister Nicola Sturgeon described the finding as “significant indeed”.
But Ukip leader Nigel Farage said he feared that “a betrayal may now be near at hand”, warning he had “a distinct feeling” that the political classes “do not accept the June 23 referendum result”.
“I now fear that every attempt will be made to block or delay the triggering of Article 50,” said Mr Farage. “If this is so, they have no idea of the level of public anger they will provoke.”
A new poll by BMG Research shows Brits are increasingly unsure about the decision to leave the EU, and would now vote narrowly to stay.