The Law Lords upheld the Court of Appeal's ruling that the use of force by Private Lee Clegg of the Parachute Regiment had been grossly disproportionate to any possible crime and said that changing the law to enable a manslaughter verdict in such cases should be a matter for Parliament.
A Parachute Regiment spokesman said yesterday: "We are disappointed with the decision. The regiment will give every support it can through the necessary channels to obtain the release of one of our colleagues convicted of an offence while doing his duty."
Clegg, 26, was serving with the regiment's 3rd Battalion in September 1990 when he and other members of a patrol fired 36 shots at a car driven by Martin Peake, 17, as it sped through their midst in a nationalist area of Belfast.
The young driver and Karen Reilly, 18, a passenger in the back seat, were killed. The soldiers justified their action by claiming that one of the patrol, Private Barry Aindow, had been hit by the car and Clegg said that he fired in self defence.
But the court was told that the bruising on Aindow's leg was caused by another soldier stamping on him to make it look as though he had been struck by the car. Clegg was sentenced to life imprisonment, only the second British soldier found guilty of murder while on duty in Northern Ireland.
The court accepted that three of the four bullets he fired were justifiable because he thought the car was being driven at Aindow but convicted him because the fourth shot, which killed Miss Reilly, was fired when the vehicle had gone past the patrol.
Since his conviction a campaign has been started by Clegg's family and present and former members of the Parachute Regiment who believe Clegg acted in accordance with the Yellow Card, which outlines the circumstances in which troops are allowed to open fire in Ulster.