Environmental groups today lost their High Court bid to challenge the government’s decision allowing the Mox reprocessing plant at Sellafield to commence commercial operation.

Friends of the Earth and Greenpeace had argued that ministers had acted illegally in approving the new mixed plutonium and uranium oxide (Mox) plant at the Cumbria site in northwest England.

But Mr Justice Collins, sitting in London, ruled on Thursday that the government had made “no error of law” in granting approval.

The two environmental groups are planning an appeal against the decision. They argued the new plant – which has been mothballed since it was built in 1996 – could not only lead to pollution, but may also become a terrorist target.

Friends of the Earth executive director Charles Secrett said in a statement, “Despite this bitter blow the campaign against Mox continues. We owe it to ourselves and future generations to do what we can to stop this nuclear madness from proceeding.”

During the two-day hearing the groups’ lawyers said there was “insufficient evidence” the plant would attract enough international customers to help make it financially viable. They said the government had taken a “distorted” view when it decided in October that allowing the introduction of Mox was “economically justified” under European Union law.

Under an EU directive, governments are required to ensure the economic, social and other benefits of new processes which create exposure to ionising radiation outweigh any detriment to health before they give the go-ahead.

Lord Lester QC, for the campaigners, told the hearing the government had ignored the £470m construction costs for the Sellafield plant when assessing its economic viability.

If all relevant costs were taken into account the scheme would show an overall financial loss, he said.

Philip Sales, for the government, disagreed and argued that the exclusion of the �470m “sunk costs” was a “perfectly rational” decision.

Potential benefits of the Sellafield plant for BNFL’s businesses were “likely to run into hundreds of millions of pounds”, but had also been left out of the balancing exercise, he said.

Agreeing with Mr Sales, Mr Justice Collins ruled that the justification for Mox “was established”.

BNFL, which runs the Sellafield plant, welcomed the judge’s ruling that the Mox operation was both lawful and justified.

“This is good news for the plant, the workforce and the local community,” the company said in a statement. BNFL said the decision would lead to the creation of about 400 jobs and should secure hundreds of others.

Friends of the Earth and Greenpeace were ordered to pay the government’s case costs. A provisional date for the appeal has been set for 27 November.