Britain could be forced to revise its anti-terrorism laws if the European Court of Justice rules today that their operation infringes the right to move freely within the EU.
A ruling against Britain would further antagonise Euro-sceptic Tory backbenchers in the wake of the recent European Court of Human Rights' verdict condemning Britain for the 1988 SAS killings of three IRA bombers in Gibraltar.
It would also fuel demands that the powers of the Luxembourg-based court should be severely curtailed in next year's EU constitutional review.
The court is due to rule on a challenge by Irishman John Gallagher to a 1991 order under the Prevention of Terrorism Act barring him from the UK.
Its judgement could open the way for Mr Gallagher, expelled for alleged connections with the IRA, to sue the Government for compensation. Other compensation claims could follow: Sinn Fein leader Gerry Adams brought a parallel case to the Luxembourg court which was withdrawn in May of this year.
In October the court was advised by its advocate general that Mr Gallagher's treatment by the British authorities was in conflict with the freedom of movement rights enshrined in the EU treaty. While the full court is free to ignore that advice, the advocate general's opinion is confirmed in eight out of 10 cases.
The key part of the interim ruling stated that although the British Government is entitled under EU law to expel individuals for security reasons, safeguards must include a full hearing by an independent authority before the expulsion decision becomes definitive. Mr Gallagher was given a hearing after his deportation by a Home Office official, and the judge implied that this could not be considered to be entirely independent.