Barry George, who spent eight years in prison after being wrongly convicted of the murder of Jill Dando, loses his high court bid for compensation as a victim of a "miscarriage of justice".
Two judges rejected Mr George's claim that the justice secretary unfairly and unlawfully decided he was "not innocent enough to be compensated".
Lord Justice Beatson and Mr Justice Irwin ruled that the secretary of state was "entirely justified in the conclusion he reached," and said that Mr George failed to meet the requirements that would entitle him to compensation.
Mr George's solicitor, Nick Baird, said: "We are very disappointed with the judgment and we shall be applying for permission to leapfrog the Court of Appeal to have the matter heard before the Supreme Court."
Mr George, 52, came to court to seek a reconsideration of his case which could have opened the way for him to claim an award of up to £500,000 for lost earnings and wrongful imprisonment. But the judges ruled that he had "failed the legal test" to receive an award.
Another three men whose convictions were later quashed also failed to win compensation. But Ian Lawless, who spent eight years behind bars for murder before being freed by the court of appeal in 2009, won his similar legal challenge.
Mr Lawless was jailed for life in 2002 after confessing to the murder of retired sea captain Alf Wilkins on the Yarborough estate in Grimsby, Lincolnshire. His conviction was later ruled unsafe after fresh medical evidence revealed he had a "pathological need for attention".
The judges ruled that in his case the decision to refuse compensation was legally flawed and must be reconsidered in the light of their judgment.
Miss Dando was shot dead outside her home in Fulham in April 1999. After his conviction in July 2001, Mr George, of Fulham, west London, was acquitted of killing the 37-year-old TV presenter at a retrial in August 2008.
Friday's high-profile compensation action was one of five test cases assembled to decide who is now entitled to payments in "miscarriage of justice" cases following a landmark decision by the Supreme Court in May 2011.
Decisions in all five cases to refuse payouts were defended by current Justice Secretary Chris Grayling in a three-day hearing last October.