PALESTINIANS’ rights activists suffered a legal setback today when the Court of Appeal overturned a ruling that local councils’ ethical boycott of Israeli goods was legal.

The Palestine Solidarity Campaign (PSC), which brought the case, said it was “incredibly disappointed” by the decision, but it would consider escalating the case to the Supreme Court.

Last June, the High Court upheld the PSC argument that local government pension scheme guidelines, which said local authorities “should not pursue policies that are contrary to UK foreign policy or UK defence policy,” were unlawful in preventing the use of boycotts, divestment and sanctions (BDS).

Then minister for communities and local government Sajid Javid ploughed ahead with the guidelines despite 98 per cent of respondents to a prior public consultation saying they thought it was wrong to invest in companies complicit in human rights abuses.

The Court of Appeal has now ruled in his favour, finding that the guidance fell within the powers of the “broad discretion” of the Secretary of State.

PSC vowed that it “will not be deterred from continuing its campaign for justice for the Palestinian people.”

Chairman Hugh Lanning warned that the ruling “will allow the government to pursue its own agenda at the expense of democracy and the ability to exercise freedom of conscience.”

He added: “The principle upheld last year by the High Court that the government should not have the power to prevent people from making ethical decisions with regard to the investment of their money remains valid.”

PSC director Ben Jamal said: “It is shameful that the UK government seeks to prevent people from exercising [BDS as a] fundamental means of peaceful protest and that the Court of Appeal has overturned the clear ruling that they were acting illegally in doing so.”

Leading Palestinian politician Aqal Taqaz blasted Israeli premier Benjamin Netanyahu while the latter was in London to meet Prime Minister Theresa May.

He condemned him as a threat to peace in the Middle East while calling for the international community to do more to pressure Tel Aviv to stop its aggression against the Palestinian people.

Israeli snipers killed more than 100 unarmed peaceful demonstrators in Gaza over the last month.

Palestine Committee for Peace and Solidarity secretary Mr Taqaz was speaking at the start of his British speaking tour during which he will meet trade unionists and peace campaigners.

He slammed Washington for supporting terrorist, destabilising countries across the Middle East in its pursuit of profit and moving the US embassy to Jerusalem.

“US imperialism has supported terrorist groups entering Syria, destroyed Iraq and Libya, killing Gadaffi and placing its economic interests above the lives of people causing hundreds of thousands of deaths,” he added.

The Palestinian People’s Party politician said the only solution was for the international community to support the Palestinians’ “right to self-determination” and an end to the illegal settlement programme. He called for a peaceful, two-state solution based on the 1967 borders.

Mr Taqaz met National Education Union officials in Oxford today and will visit Birmingham tomorrow before a talk at the Marx Memorial Library in London in the evening, where he will be building the case for a peaceful solution to the crisis and wars raging across the Middle East.