His supporters had hoped the Home Secretary, Jack Straw, would allow him to stay on compassionate grounds after a wave of backing for his case. Mr James came to Britain aged 14 and was abandoned by his family two years later.
He came to the attention of the authorities seven years ago when he approached them to make his status official because he wanted a passport to travel as part of his broking business.
Since his case was first raised in The Independent, Mr James has received support from all sections of society, including the minister for Public Health, Tessa Jowell, who is his MP, and the chairman of the Commission for Racial Equality, Sir Herman Ouseley.
But in June he was arrested and taken to a detention centre near Gatwick airport to be deported. Hours before he was to be flown to Nigeria his lawyers secured a temporary release for a final court hearing.
Since then thousands of people have written to the Home Office calling for him to be allowed to stay and he has been backed by the Home Office staff union, the Public and Commercial Services Union.
A new submission was made to the Home Office, pointing out that Mr James, who lives in London, had become a role model in the black community as a successful young entrepreneur. But yesterday the Home Office wrote to him to say the "needs for firm immigration controls" outweighed the factors in favour of his being allowed to remain.
His lawyer, David Burgess, said: "We are very disappointed that the strong points made in respect of the impact on the black community have not been seen as sufficiently important."
Mr James said that although he was flattered by the interest of the black media in his case he "preferred not to regard it as a race issue. My life is in limbo but I have got no choice but to fight on. Although I am fighting alone I know that there are many people supporting me and praying for me to prevail."Reuse content