Two suspected Algerian terrorists cannot be deported for reasons that are too secret to disclose, the Court of Appeal ruled yesterday.

Evidence heard behind closed doors suggests that the human rights of at least one of them would be breached if he were returned to Algeria.

In the case of a third man, acquitted two years ago in the so-called "ricin trial", the appeal judges said more consideration should have been given to the risk that he might be tortured in Algeria.

The ruling is seen as a major setback for the Government's attempts, announced two years ago, to deport suspected terrorists on the strength of diplomatic assurances of proper treatment.

The first appeal was brought by a 44-year-old Algerian known by the initial U. After leaving Algeria and claiming asylum in Britain, he spent three years in Afghanistan. Two years ago, the then home secretary sought to deport him as a risk to national security.

U did not challenge the finding that he was a security risk, claiming only that he would face torture in Algeria and would not receive a fair trial. SIAC, the special anti-terrorist court, rejected U's human rights claims after hearing evidence both publicly and in closed session.

That conclusion was justified on the open evidence, the Court of Appeal said yesterday. But, having heard the secret, "closed" evidence, the appeal judges said they could no longer "express the same degree of confidence".

The Master of the Rolls, Sir Anthony Clarke, sitting with Lord Justice Buxton and Lady Justice Smith, continued: "We cannot, of course, explain in any detail why we have reached that view. All we can say is that we have been shown closed evidence which is capable of undermining SIAC's overall conclusion."

Since SIAC had not adequately explained why it thought the closed evidence did not undermine the conclusion it had reached in its open judgment, U's case would be sent back to SIAC for reconsideration.

The second case involved an Algerian known as BB. He came to Britain in 1995 and was refused asylum 10 years later.

SIAC upheld the home secretary's conclusion that BB was a danger to national security. But yesterday the Court of Appeal allowed his appeal on secret grounds. "For the reasons set out in our closed judgment, and on the case as a whole, we are persuaded that the case should be remitted to SIAC for further consideration," the three judges said.

The third case involved an Algerian, known as Y, who was given leave to remain in Britain in 2001. He stood trial with four others at the Old Bailey from 2004 to 2005 in the so-called ricin trial. Y was acquitted of conspiracy to murder but one of the accused, Kamel Bourgass, was convicted of conspiracy to cause a public nuisance.

In September 2005, the home secretary decided to deport him as a security risk. Y claimed he faced at a real risk of torture if sent back. Following the European Court ruling in the Chahal case, he could not be sent back to face torture.

Evidence was given to SIAC that Y was entitled to protection under Algerian law. But the Court of Appeal said that SIAC should have sought evidence of what the Algerians might do in practice.

Reliance on an article of Algerian law "without any evidential basis for it beyond the reading of the words of the article led to potential injustice for Y," the court said. That amounted to an error of law that entitled the court to intervene. Y's case was also remitted to SIAC for reconsideration.

Gareth Peirce, solicitor for two of the men, said the ruling was a "complete nightmare" for her clients to comprehend. "We have no idea of the court's reasons," she added. "The case produces complete uncertainty where there should be certainty."

But, she added, it was a "red light" stopping the Government sending terrorist suspects back to Algeria, at least in the short-term.

All three men will remain in custody unless SIAC grants bail.