Alarmed residents have lost their High Court battle to prevent surface-to-air missiles being stationed on the roof of a 17-storey residential tower block during the Olympics.
A judge ruled today residents at the Fred Wigg Tower in Leytonstone, east London, did not have an arguable case.
The tenants fear the missile base above their heads could make them the focus for a terrorist attack.
The Ministry of Defence (MoD), security service and police say there is "no credible threat" and the siting of the missiles is both "legitimate and proportionate".
The block is one of six sites in the capital where missiles, including rapier and high-velocity systems, will be deployed to protect Games venues.
The Fred Wigg residents applied for permission to seek judicial review, protesting there has been a "disproportionate interference" with their human rights, and they were not consulted fairly and properly over the siting of the ground-based air defence system.
Their lawyers argued during a one-day hearing yesterday that those who wanted to move out should at least be relocated in hotels by the MoD for the duration of the Games, or a gantry should be erected away from the block to take the missile system.
But today their legal challenge was rejected by Mr Justice Haddon-Cave, sitting at London's High Court, who said: "The law and the facts militate against the claim for judicial review.
"In my judgment the MoD's voluntary engagement with the community and residents in this matter were immaculate".
The judge said residents had expressed "shock, anxiety and worry" over the prospect of missiles being stationed at the tower.
But they had been under "something of a misapprehension" about the nature of the equipment to be deployed and the risks deployment would bring.
Yesterday Marc Willers, representing the residents, told the court: "It is the unprecedented siting of a military base or missile site in peace time on English soil that brings us to this court."
He said of the residents: "They have a fully justified fear that installation or deployment of the missile system on the roof of the Fred Wigg Tower gives rise to the additional risk that the tower itself may become the focus of a terrorist attack."
The fear was not just genuine but justified "given the nature of the forthcoming occasion - the Olympic Games - and given the nature of the deployment and the current threat level, which is said to be 'substantial"'.
Mr Willers accused the Defence Secretary of breaching Article 8 and Article 1 of Protocol 1 of the European Convention on Human Rights, which protect an individual's right to private and family life and the peaceful enjoyment of their home.
He also argued the MoD failed to conduct a proper equality impact assessment (EIA), taking into account the needs of disabled residents.
David Forsdick, representing Defence Secretary Philip Hammond, said top Ministry of Defence officials, UK intelligence agencies and the Metropolitan Police had all rejected the possibility of an attack on the Fred Wigg block.
He said Dr Campbell McCafferty, head of UK counter-terrorism at the MoD, and General Sir Nick Parker, who has overall responsibility for national security in respect of liaison with civil authorities, had both stated "in no uncertain terms" there was no credible threat.
Mr Forsdick argued Mr Hammond was under no statutory duty to consult, although an impact assessment had been carried out and residents' human rights taken into consideration.
But residents had no legitimate expectation that they would be consulted on issues involving the defence of the realm and national security.
The decision over where to position the missiles was taken at the "highest levels after rigorous scrutiny" and signed off by the prime minister, deputy prime minister, home secretary and defence secretary.
Mr Hammond was "the master of procedures" and entitled to conclude there was no alternative to the use of the Fred Wigg Tower.
Defence of the realm was a "legitimate and proportionate" aim, and the MoD was not legally obliged to relocate residents or offer them compensation.
Mr Willers accused the MoD of "displaying an element of contempt for the concerns and views of the residents".
He said an assault might not be aimed at all the missile sites being set to protect the Games but there might be an attack on the block that was no more than a bid "to make an evil statement - but a statement nevertheless".
The Defence Secretary has described the ground-based air defence systems as "just one part of a comprehensive, multi-layered air security plan" which would provide "both reassurance and a powerful deterrent" during the Games.
The security plan includes a helicopter carrier, HMS Ocean, being moored in the River Thames, with RAF Typhoon jets stationed ready at RAF Northolt and Puma helicopters at a Territorial Army centre in Ilford.
The other sites chosen to guard against any Olympic air threat are the Lexington Building in Tower Hamlets, east London; Blackheath Common and Oxleas Wood, both in south-east London; William Girling Reservoir in the Lea Valley reservoir chain in Enfield; and Barn Hill at Netherhouse Farm in Epping Forest.
Mr Forsdick said the deployment will "happen imminently and will not be stayed".
Any appeal application would have to be "immediate".
He said "we have alerted the Court of Appeal of the possibility of an urgent application".
Mr Willers said that any appeal move would be made "possibly tomorrow morning".
Outside the Law Courts, the residents' solicitor Martin Howe, of Howe & Co, said: "We are very disappointed with the decision."
Mr Howe said he was now going to sit down with the residents "and explain that by this Friday missiles will be on their roof".
A decision would then be made on whether or not to ask the appeal court to hear the case, said Mr Howe.
Referring to today's judgment, he said: "The judge looked at the possibility of a gantry being built for the missiles to be placed on, instead of on the roof of people's homes.
"He dismissed the idea. The fact is a scaffolding company phoned my firm today and said that within a couple of days they could construct such a tower.
"I am sure it is not beyond the wit of the MoD to be able to do so as well."
Mr Howe said there was "real fear" in Fred Wigg Tower over tenants being forced to share their block with missiles.
The fear was exacerbated by the fact that last December residents, including children and disabled, were evacuated "down a narrow and difficult smoke-filled staircase" in the middle of the night after a fire broke out in the block.
Mr Howe said that, given that ordeal, "it would be proportionate and sensible to re-house (during the Games) those who have that fear.
"There are plenty of empty hotel rooms all round London because the take-up for the Olympics has not been what was expected."
The cost would have been "a drop in the ocean" compared with the £11 billion spent on the Games, said Mr Howe.
Rejecting the case brought by the residents, the judge said: "In the result the claimants are refused permission to apply for judicial review on the grounds that a) their grounds are unarguable in law and in fact and b) the proceedings were not brought promptly."
At the start of his ruling he said London "has the privilege" of hosting the 2012 Games and that a "magnificent" Olympic Park had been constructed in Stratford.
Hundreds of thousands of spectators were expected to attend and the "eyes of the world will be focused on the Olympic Park".
The judge said: "It is clearly necessary to protect the Olympic Park from potential terrorist attack both from the air and the ground.
"Previous Olympics have similarly been protected, particularly since 9/11. The 2012 Olympics are potentially a major target."
The urgency of the case arose "because the air security plan needs to be deployed and operational before the Olympic Village opens in just five days time to begin to receive the athletes".
He said: "The first duty of Government is to defend the realm and to protect national security, including by protecting the public from terrorist attack."
Military deployments were "necessary from time to time in a democratic society".
He added that it was "manifestly obvious" that the deployment at the centre of the case "is necessary at the current time to protect the Olympics".
The present circumstances were "unprecedented" and the deployment "is for the legitimate purpose of national security and public safety".
He ruled that the various grounds relied on by the residents were "unarguable", including a complaint that the Secretary of State was in breach of his duty to consult.
A Ministry of Defence spokesman said: "We are pleased the High Court has found in our favour. We maintain that GBAD is an essential part of the multi-layered air security plan and we have always said we are planning for the worst case scenario, not the most likely scenario.
"We acknowledge that the deployment, albeit temporarily for the Games, of military equipment and personnel can be unsettling particularly where the community may not be used to a military presence.
"We will continue to engage with local communities to provide reassurance and reduce any impact on residents as far as possible."
Mr Howe's partner, David Enright, said the clear implication of today's judgment was that "the MoD now has power to militarise the private homes of any person" even when there was no war on, or state of emergency declared.
Mr Enright said: "They do not need to ask you, do not need to consult you, but can take over your home and put a missile on the roof, a tank on the lawn and soldiers in the front living room, exercising powers under the Royal Prerogative.
"Parliament has not been consulted on this dramatic change in the English way of life.
"We have always believed an Englishman's home is his castle - not a forward operating base.
"It is vital that Parliament look at this. We have passed the Rubicon in the way we live our lives."
Mr Enright said in times of war and national emergency "anyone of us would open our doors and assist the armed forces".
But the 2012 Olympics were taking place "in peace time - a happy time".