Telecom group BT has lost a court appeal against a ruling by the European Commission that its £39.6 billion pension scheme is not exempt from paying a levy to the Pension Protection Fund, even though BT members were separately protected by a UK government guarantee.

The decision by the European Court of Justice on Wednesday marks the end of a lengthy battle dating back to 2009 when BT challenged a ruling by the European Commission which decided its exemption from the levy amounted to a state subsidy.