The High Court in London today dismissed an appeal by three British bankers against extradition to the United States on charges relating to the 2001 collapse of Enron.

In a landmark judgement, David Bermingham, Gary Mulgrew and Giles Darby, all former investment specialists for NatWest, failed to overturn the extradition order made by a Bow Street district judge and confirmed by Charles Clarke, the Home Secretary, last year.

The trio also lost an appeal for Britain's Serious Fraud Office to review their case.

The ruling has been criticised by representatives of the three men as further evidence of the British legal establishment caving in to pressure from the "aggressive" justice system of the US.

The trio - known as the Enron 3 - are accused of defrauding Greenwich NatWest, a Connecticut-based subsidiary of NatWest which is now part of Royal Bank of Scotland, of $7.3 million (£4.2 million) by investing in an off-balance sheet Enron partnership.

The alleged offences centre on the sale of Swap Sub - a NatWest subsidiary company - to Enron for a knock-down price. They came to light after the energy company's collapse into bankruptcy in the wake of a false accounting scandal which rocked corporate America.

The judgment marks the first test case of the Government’s 2003 Extradition Act and several other high-profile cases are awaiting the outcome.

Lawyers for Mr Bermingham, of Oxfordshire, Mr Mulgrew, of Essex, and Mr Darby, of Wiltshire, mounted a dual-pronged legal challenge against the Home Secretary's decision.

They argued that, as they are British and the alleged victim of the fraud is ultimately a British company, they should be prosecuted in the UK.

They also claimed that the offences do not fall within those covered by extradition legislation, adding that being forced to stand trial in the US was a violation of European human rights law.

Lord Justice Laws and Mr Justice Ouseley dismissed both challenges. Lord Justice Laws ruled the case "has very substantial connections with the United States and is perfectly properly triable there".

He said there was a significant United States dimension to the case and said that it would be would be unduly simplistic to treat the case as a domestic English affair.

Mr Justice Ouseley agreed, and both judges also ruled that the trio’s extradition would not be disproportionate when set against their rights to private and family life under the European Convention on Human Rights.

The new extradition laws were largely justified by the UK Government as a necessary response to the threat of terrorism after 9/11. Commentators have remarked on the irony that the first challenge, and many of those awaiting its verdict, involve white-collar crime.

A central change is that certain countries, including the US, no longer have to produce prime facie evidence - proof that there is a case to answer - in order to have a suspect extradited from the UK. US citizens cannot yet be extradited to Britain in a similar way.

After today’s ruling, Mark Spragg, the solicitor representing the three men, spoke of the wider consequences of the decision.

He said: "This judgment means that no UK person or body has to decide which country should prosecute an alleged offence involving more than one country. Whichever country gets there first will, whatever its motives, seize jurisdiction - however severe the effects on a defendant and his family.

"The USA justice system has a long and aggressive extra-territorial reach, and will increasingly apply for the extradition of UK citizens for allegedly criminal conduct committed against UK institutions. There appear to be no legal protections against this at all."

The judges certified that the case raised issues of general public importance - the first step in seeking leave to appeal to the House of Lords, which must be lodged within 14 days.

The three men were ordered to pay legal costs, including £44,000 to the US Government. Other costs have yet to be assessed.

Speaking after the decision, Mr Mulgrew, 43, a single parent who has a 10-year-old son, said he felt he was "living in a parallel universe". He said fighting the case in the US could cost up to $2 million.

Outside the court, he said: "Frankly we are shocked by the verdict, bewildered. It is a historical verdict, but maybe historical for the wrong reasons. I think this is a worrying verdict for many people. It seems to be irrelevant that the UK authorities do not believe that there is a crime committed against NatWest.

"Even though we have the victims saying 'we are not a victim', we are still supposed to go to Texas to defend ourselves."

Mr Bermingham, 43, said the British Government had failed in its first duty, which he said was to protect its citizens. He said the three men were being used as "political currency" to "curry favour" with another government.

"This case is going to have a profound impact, not just on us, but many, many people, some who are already in the system," he said.

He added: "We ask one fundamental question of principle: If a British citizen can be accused without evidence by a foreign government about crimes allegedly committed in this country, should that citizen be able to defend themselves against those allegations in this country?

"If the answer to that question is no, as it would appear from today’s judgment, and if that was genuinely the intention of government when it passed this legislation, I can honestly say for the first time in my life today: I’m ashamed to be British."

Shami Chakrabarti, director of Liberty, said the decision was "nothing short of a disgrace" and the trio were being traded like "sacks of parrots".

She said: "It is yet another supine step in this so-called special relationship ... this, I’m afraid to say, is all about politics and not at all about justice."

The men have claimed that if they are extradited and found guilty in the US they could face up to 35 years in jail.

The trial of former top Enron executives Kenneth Lay and Jeffrey Skilling began in Houston at the end of January. They are charged with fraud and conspiracy.

Andrew Fastow, former Enron chief financial officer, has pleaded guilty to two conspiracy counts and agreed to testify against his former bosses in exchange for a maximum 10-year prison sentence.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts