The two election court judges ruled that there was nothing unlawful in Richard Huggett's nomination as a Literal Democrat in the Devon and East Plymouth European election in June.
Adrian Sanders, the Liberal Democrat candidate, lost to the Conservative, Giles Chichester, by only 700 votes - less than 1 per cent of the 527,000 electorate. Mr Sanders sought to overturn the result, claiming the returning officer should have rejected Mr Huggett's nomination paper which was ``calculated to confuse the electors''. Mr Huggett, a retired headteacher, polled more than 10,000 votes although he did not campaign or issue election literature.
But Mr Justice Dyson and Mr Justice Forbes ruled that Mr Huggett's candidature was perfectly legal and that the returning officer had not breached his duty by allowing him to stand.
The judges agreed ``Literal Democrat'' would confuse and mislead voters, but pointed out that, under British electoral law, candidates have to identify themselves by name and home address. There is no mention in the Representation of the People Act that party must be included.
``It is clear to us that contrary to what might be thought the popular view, Parliament has focused on certain minimum criteria for identifying candidates which do not include references to political parties,'' said Mr Justice Dyson. ``The rules do not prohibit candidates - whether out of spite or a wicked sense of fun - from describing themselves in a confusing way or indulging in spoiling tactics.''
Outside court, Mr Sanders said the Liberal Democrats were disappointed with the result of the case, which could cost pounds 150,000, and were considering an appeal.
``We are disappointed for the people of Devon and democracy,'' he said. ``This judgment, if it stands, is declaring an open season for soundalike and spoiling candidates in all future elections''.
A jubilant Mr Chichester said his faith in British justice had been restored. ``I was very glad that the cloud hanging over my head for five months has been conclusively removed by the court. I have always believed it was an arrogant assumption of the Liberal Democrats that 10,000 voters voted Literal Democrat by mistake.''
A new political organisation calling itself the Conversative Party, announced last night that it intended to target up to 4,000 Tory marginal seats in local elections next year. Alan Cornish, the self-styled leader of the Conversatives and a former unsuccessful candidate for the Liberal Democrats, said his aim was to force the Government to address the issue.