Stringent conditions were imposed by HM Treasury to comply with a United Nations Security Council resolution issued four years ago aimed at stopping funds reaching "persons designated as an associate of Osama bin Laden", al-Qaeda or the Taliban.

The women - none of whom is accused of terrorist links - complained that the restrictions meant they could only spend their benefit payments on "basic expenses" and they had to account for every penny.

Although the women are entitled to benefits, the regulation system rigorously controls their access to the cash.

Deputy judge Kenneth Parker QC, rejecting the application for judicial review of the HM Treasury orders, said the prohibitions were deliberately draconian.

"It is clear from the terms of the resolutions that the intention of the Security Council was to remove, in principle and subject to humanitarian considerations, all economic support from listed persons, with a view to achieving public policy objectives of the highest importance, namely, combating international terrorism and promoting peace, security and safety."

The payments concerned cover benefits including council tax, child benefit, disability allowance and income support.

The women are from London, Manchester and Birmingham and are protected by court anonymity orders. They were granted leave to appeal.

The deputy judge was told by Simon Cox, representing the wives, that the Treasury "licence" limited them to spending benefits on necessities such as food, rent and medical treatment, but barred paying for a taxi or bus or for paying for their children to go swimming or to the cinema.

All must make an itemised return of their purchases and some can only withdraw £10 at a time.

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