Four victims of intrusion by the UK press have lost a High Court fight against the government over its decision to scrap the second part of the Leveson Inquiry into media standards.

Christopher Jefferies, Kate and Gerry McCann and Jacqui Hames had brought a judicial review against the government’s move.

Dismissing the case, Lord Justice Davis said: “I have ... a great deal of sympathy for the claimants.

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“I can readily understand their bitter disappointment at what has eventuated.

“But I am afraid that sympathy cannot override the law, and I can see absolutely no basis for these grounds of claim ... achieving the result which the claimants seek.”

The second part of the inquiry was due to look into unlawful conduct within media organisations as well as relations between police and the press.

But in March, then-culture secretary Matt Hancock decided reopening the “costly and time-consuming” inquiry on press regulation and ethics was not “the right way forward”.

He said the media landscape had changed significantly since the 2011 phone hacking scandal and justice had been served via the criminal trials of some of those involved.

At a hearing earlier this month, the court heard David Cameron made a “clear and unambiguous commitment” that the second phase of Leveson would go ahead at a meeting with phone-hacking victims in November 2012.

Helen Mountfield QC, representing the four who brought the judicial review, told the court there “could hardly be matters of greater public importance” than the issues Leveson part two was due to look into.

She argued the decision to cancel it was “unlawful” because the four had a “legitimate expectation” it would go ahead following the meeting with Mr Cameron, who was prime minister at the time.

The government argued Mr Cameron’s statements at the meeting “did not give rise to a binding obligation” to proceed with the second part of the inquiry.

They also took issue with a “covert recording” of the 2012 meeting, made by an unknown person associated with the Hacked Off campaign group, which had only recently been disclosed to the government’s legal team.

Ms Hames, a former police officer and Crimewatch presenter whose phone was hacked, responded to the High Court ruling by saying: “The government’s capitulation once again to newspaper owners and executives, over the cancellation of the inquiry before it had been allowed to finish its work, was an act of extraordinary cowardice.

“Extensive criminal activity occurred at some of the country’s most powerful newspapers, yet not a single executive has been held accountable – and now the government will not even allow the agreed and promised public inquiry to finish.”

Ms Hames received apologies and damages from News Group Newspapers, part of News UK, and Trinity Mirror over phone hacking and other illegal activity.

Bristol landlord Mr Jefferies, who was libelled by the press when he was wrongly accused of the murder of Joanna Yeates in 2010, told the Leveson Inquiry he was “vilified” by the media.

The McCanns complained of press intrusion into their lives after their daughter Madeleine went missing on holiday in Portugal in 2007.

Conservative Peer Baroness Warsi said: “The daily torrent of religious bigotry in the press urgently needs to be addressed, and the completion of the Leveson Inquiry with extended terms of reference to investigate rising press Islamophobia would have been the best way to achieve that.

“In failing to go ahead with part two of the inquiry, the government has signalled that it is prepared to stand by as some of our fellow citizens are regularly subjected to demonising and dehumanising false smears in the pages of some newspapers that leads to hostility on our streets.

“The government should proceed with part two immediately, because the press have proven either unable or unwilling to reform themselves.”

A spokesperson for the Department for Culture Media and Sport welcomed the judgment, saying it was “committed to ensuring that the inexcusable practices that led to the Leveson Inquiry will never happen again”.

“We believe that the steps we have taken mean that continuing with part two is no longer appropriate, proportionate, or in the public interest,” they added.

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